The Housing Bubble

Gasoline consumption is not increasing. People are moving towards hybrids such as the Prius. You see this in the rural areas as the commuter vehicles all look like eggs now.

I did not say gasoline consumption was increasing I said it would increase if people started to drive further to buy homes. BTW, people are back buying trucks and very few are changing and buying a Prius.

BTW, all electric cars sales including hybrids such as a Prius make up only 3.8% of the total market. We are still a nation that loves to be able to hang the balls from the trailer hitch.

http://www.csmonitor.com/Environment/Energy-Voices/2014/0204/Nissan-Leaf-sales-slip-on-icy-weather-video

1-2 punch:

1) Pre-2008: Priced out SD buyers move to distant enclaves like Murrietta, Temecula and Ramona where prices remained “affordable.”

2) Post-2008: Unemployed SD owners living in distant enclaves discover they couldn’t afford their old commutes even if they were still employed, thanks to unaffordable gas prices.

That’s hilarious, an allegedly grown adult who has never left mom’s basement is calling other people parasites.

Get a life.

Why is that when I read Amy’s comments I immediately picture “her” as that guy from “Silence of the Lambs.”

“It signs the mortgage with its pen or else it gets the hose again…..”

Anyone resorting to the “mom’s basement” attack has completely lost the argument.

Indeed. Ad hominem is essentially an admission of oratory/literary defeat and should always be interpreted as such.

Wow, come to think of it that’s a pretty good metaphor for our macroeconomic environment in general.

You have Bernanke now all dressed up as a woman(Yellen), with the American people in a deep hole, and she’s all like “it puts the mortgage in the basket(of economic goods).”

“It signs the mortgage with its pen or else it gets the [currency debasement] hose again!”

Meanwhile, Goldman Sachs [played by Sir Anthony Hopkins] is pulling the strings behind the scenes and going “I ate the Middle Classes’ liver with some fava beans, and a nice Chianti….thithithithithtihtith!!”

“Tell me about the retirement plans Clarice…..can you still hear them screaming as they are being slaughtered?”

“I can smell your cut (of the 6%.)”

why do I see so many mattresses and couches on the side of the road these days?

why do I see so many mattresses and couches on the side of the road these days?

Because they fell off the turnip truck?

But they’re a convenient no cost business tool for Lola.

But they’re a convenient no cost business tool for Lola.

Curbside service.

I like it when the owner lets us poke the turd with sticks……

It’s a good idea because they’re going to provide things like basic accounts and nearly-free check cashing to unbanked people. And seeing how poorly run and anti-consumer the big banks are these days (see, for example, their nebulous lists of fees and their virtual-elimination of free checking) I support the idea.

Cutting down on fees for check cashing is a good, simple way to eliminate waste and help more money be spent on actual goods and services, not economic middlemen.

Anything that undercuts Megabank, Inc’s ability to charge monopoly banking fees on its zero percent savings account products has to be a good thing.

The poor definitely need a non-profit version of an electronic mattress for direct deposit and debit cards, which is all most checking accounts are anyway. I hope that the Post Office debit account would actually refuse a purchase that went over limit, instead of calling allowing a purchase and penalizing it as a “loan.”

It would also cut down on the new(?) trend of paying people in pre-pay Visa cards instead of cash. (can you use a pre-pay card to pay debts, or are you forced to buy stuff with it and get change?)

Maybe the Post Offices can offer MyRAs too.

I know how much corner check-cashing places are bc some of our tenants are unbanked and also don’t have cars so they can’t/don’t shop around to find cheaper cashing options. They’ll pay like $10 to cash a $400-something check. Not a personal check, mind you, but a payroll check from Johns Hopkins or the city/state. In other words, something that can easily be validated and absolutely won’t bounce. When I found out about this, I offered to have them sign the check over to me and I just show up with cash to give them the difference when I pick up rent. I don’t do this for everyone, but I have some reliable people who will probably never leave because I provide that service.

“when I pick up rent.”

I had no idea you were a slum lord Liberace. Good to know.

It’s pretty humorous that you paint me as some elitist but I’m the one who actually knows how people live on $30k-40k per year. And no these aren’t slums, they’re small rowhomes in Greektown Baltimore that rent for like $1000-1300/month. Owned free & clear. And yes, the depreciation does wonders as far as helping my parents & in laws with their taxes. Sorry, your usual depreciation schtick doesn’t work as a criticism when the depreciation is a legit business expense. And these aren’t the kind of places that rack up big maintenance bills, the average tenant is just happy to have a nice comfortable place, no need for bells & whistles.

The tenants in the nicer places obviously mail their checks, but some of the older people have always paid in person and prefer to do so. Trust me, I’d rather that they just mail it, but longtime tenants are the ones who treat the place well and I’d never lose them because I was too proud to stop by at their convenience to get a check.

I think he helps out his parents in running low-down shopping strip centers of the chinese-restaurant/nail-place type. In between, he reads the urban baby blog. He must have 48 hours in his day.

Sorry, your usual depreciation schtick doesn’t work as a criticism when the depreciation is a legit business expense.

Either it’s a schtick or it isn’t. You got yourself wrapped up in another tall tale again.

“And these aren’t the kind of places that rack up big maintenance bills”

Just keep it on ignore. I’m lovin’ every minute of it.

“Trust me”

Like everyone else here, I don’t.

“He must have 48 hours in his day.”

Not to mention all those “late nights at the office” that are actually spent at his Dupont Circle pied-a-terre studio chasing some downlow.

I don’t do any late nights. I also don’t pick up many payments and the ones I do are right near my in-laws’ house.

You guys (correctly) like to laugh at idiot LL’s who bought in the 00’s on the premise that they could rent for a few yrs and then cash in and sell for huge profits. There was a post last week from another poster about how a coworker, an old school Greek guy (like my in laws) had acquired like 20 rental houses during his working years. If he’s like my in laws, that means he never looked beyond 8-10 blocks of his own house and he maybe bought 1 house every 15-18 months for a 30 year period. Bought way before the 90s/00s bubbles and paid cash for most. Modest places, 2-3 BR, concrete block and brick.

RAL, I’m not talking deferring legit maintenance, I’m talking not putting in granite or gutting perfectly good bathrooms to make them fancier. And my in laws and parents would only use tradesmen they know and trust.

Not everyone is a cash-strapped loser who is sweating bullets to pay bills. And yes, someone buying a “rental” in 2005 and seeing it barely pencil out to a small profit is a loser, they should’ve put that money somewhere else. Some people just like paid off houses and keeping some of their investment money in local RE. It’s also worth noting that I’m not out there saying people should buy houses or start LL-ing. Prices are too high now. But if you had houses from the 60s-80s and they’re paid off yet also create tax advantages, you’d be an idiot to sell off without considering the tax implications.

So if you bought post 1980’s, you got rocks in your head.

It’s about time you said it.

What does that have to do with reducing economic waste like transaction costs (in this case, check cashing)?

In any case, you can take a check to the bank of origin and cash it without any fee whatsoever. In most cases the check is coming from a Wells Fargo, Chase, or First National, or even BofA, all of which have local branches. People are using check cashing services for convenience. Worse case scenario, you get 3 or 4 people together and open a single checking account, then use that account to cash all your checks. It isn’t rocket science, and that’s what the general pop using these services is forgetting.

I don’t think you understand what they are proposing…
“Check Cashing” in and of itself is great.
Payday Loan “check cashing”… well now that is an entirely different business model (usually for low income folks unable to obtain lending from more reputable institutions). Interest rates are typically 3x to 10x higher than standard usary rates and very short-term (2-4 weeks).

Think of it as loan-sharking without Guido to break your leg if you don’t pay.

Funny thing is, the funding for these storefront and internet based pay-day lenders is provided by you know who (THE BIG BANKS! Wells Fargo, BoA, etc.). Nice way for them to circumvent usary laws and charge whatever they want for the unwary.

State Attorney Generals are have started class-action lawsuits against these scamsters, unfortunately I suspect that the big banks won’t be affected.

tgun, I too wondered which type of check-cashing this was. But I can’t imagine Elizabeth Warren coming out in favor of payday loans of any stripe, and would the Post Office be allowed to offer such a service? This must be legit check cashing.

“In any case, you can take a check to the bank of origin and cash it without any fee whatsoever.”

This is a completely false statement. Banks routinely charge non-account holders to cash checks drawn on their own bank. In fact, U-Haul once gave me a refund in the form of a check because they did not have cash on hand. Bank of America tried to charge me $10 because I was not an account holder (my credit union was in a different town). I called U-Haul and said “Nuh-uh, not paying $10 to cash a check, give me cash.” They did.

The check was probably not written at/from bank of america then. The only problem I have ever run into was when I didn’t have my ID with me to prove that I was person the check was written to. Other than that, Bank of America check = go to bank of america, show ID, get cash for check. Perhaps some bank would charge you a fee to cash a check from one of their own customers, but I bet their customers would quickly get pissed and drop them if they found out about it because no one from then on would accept checks from them.

“The check was probably not written at/from bank of america then.”

I was at the servicing branch where the account was opened, dillweed.

Oh, and I used to work for Bank of America years ago. You have no fu*king idea what you’re talking about. When you don’t know the subject matter, SHUT UP.

Bank Of America Charges You To Cash Its Own Checks If You’re Not A Customer

Bank of America doesn’t think cashing checks drawn on its own accounts is a service that should be free to no-name people who come in off the streets—they want $6 for that privilege, one reader recently discovered.

http://consumerist.com/2009/03/27/bank-of-america-charges-you-to-cash-its-own-checks-if-youre-not-a-customer/

You’re a legend in your own mind, RAL. Never change. It brings me “alot” (sic) of joy.

You realize how expensive the building materials would be to build a brownstone in Park Slope, no? You would never get approved for permits using cheap cr*p.

And I’m not even saying this as someone who wants to live some “UrbanBaby” (the blog) lifestyle. But when you build for $50/sq ft., you are not accounting for quality. The façade alone for such a brownstone would blow your builder-grade budget out of the water.

Building a house out of Legos and paying yourself with Monopoly money in mom’s basement again?

Silly cherrypicking Liberace.

How is it cherry-picking when you say EVERYWHERE.

Yes, you could do this in 99% of the landmass in North America. That’s not the point. The population of north America is highly concentrated in 1% of the landmass. Due to facts life like network effects and energy costs, you’re always going to have a large % of people living on a small % of the total land.

And how much of total transaction volume is brownstones Cherrypickin’ Liberace?

If you want to join that club, I suggest doing so on the lender, not the borrower, side. I took an online course that used some of their raw data in a statistical analysis assignment. I’m posting one of the graphs I created which should give you the basic idea.

I do a very large amount of buying on LendingClub. It’s been very good to me and if you have any questions let me know. I have a normal job but managed to become an institutional portfolio manager on the side.

‘ I’m sure that more than $500 in economic activity has been transferred’

Not likely. It is pretty simple for the ads you see to corelate to your browsing history.

Tell me about it. Every time I do a search for something I want to buy and dare to click on an item, it follows me around for a while. Most annoying.

” I am drooling over a $500 light fixture”

Do it. Throw some more good money after bad. You’ve got nothing to lose. Another $500 for a $50 item is like raindrops in the desert in your world.

Maybe it doesn’t cost much for the software to run the program, but what is the price paid of all that data, or even for targeted junk mail? It was enough to fund Google’s legendary cafeteria (from what? I never paid a penny for a google search), or to make JZuck a billionaire (from what? You don’t have to buy Facebook like you buy a car), enough to make Dan Snyder a millionaire/billionaire. Same thing for Twitter and other blogs and newspaper websites and YouTube. I don’t get it.

I once clicked on an ad from Ben’s sidebar that had a pic of a pretty girl on it. It wasn’t an ad for “that type” of service, but the model had “that type” of look. I clicked it because I have always been heavily attracted to sidebar ads. There’s something about the vertical accessibility that keeps me clicking. Ever since then, whenever I access his site from that same computer, I get ads for Asian mail-order brides. And I click on them too!

do thy have usury laws? make your neighbor a debt serf?

The things about lending money to a deadbeat is that you might not get paid back. What good is 20% interest if you end up getting stiffed?

He doesn’t care. He already sold the loan up the food chain, either to Fannie Mae or to some GS debt swap or whatever “product” it is these days. So the best work in the world is really to collect fees on a loan made whole by labor done by someone else and whose risks are assumed by somebody else.

Yep.

He doesn’t care. He already sold the loan up the food chain

He did mention a steady cash flow coming to him. Sounds more like a one time “cut”. A very healthy cut, but still one time.

The only way to get those monthly checks, with the juicy interest payments, is to hold the note yourself.

It depends on the swap. Many still have monthly payments, you are simply swapping something less important for something more important, with the most common variables being interest rate and time period.

It’s really not that different than doing balance transfers on a credit card, in which case you are swapping for a lower interest rate.

On a Presidential level, if Texas goes blue, then nobody will be talking about Ohio Ohio Ohio. At that point, the only hope for the Republicans is to either split the Texas electoral votes like Nebraska(?), or to try to get rid of the electoral college altogether.

If I was working at GOP HQ, the short-term thing I’d try to do is start lobbying to eliminate the Electoral College or change allocation of delegates at the state level. It helps because you can gerrymander enough of an advantage to significantly help your candidate.

Look at 2012… Obama re-elected comfortably, wins the popular vote by a couple million votes. Yet, GOP has a solid advantage in the House. This is because through lobbying and finagling, they were able to draw the lines almost surgically. So they would win more seats even if voters nationally didn’t favor their party’s positions.

In the long-term, though, they need to stop simultaneously undermining American working people and taxpayers (food stamps=cut cut cut, but wars abroad = hey lets just spend billions!) and also take on at least a few positions that could make them less radioactive to young people and minorities.

The Republicans are finished as a party. They’re done. And I say, good riddance. Not that I like the Dems any better, in fact, watch the Dems split into factions after the Republican party fades out. I’m looking forward to that show.

‘if Texas goes blue’

But it was Democrat. From the 1860’s (excluding the reconstruction era) until 1980’s. What you’re missing is the evolution of the two party system. Of course, a multi-party system would actually be democratic (small D), but a one party system can’t exist unless everyone thinks the same.

There are so many large issues in flux, most having to do with the economy. You probably aren’t considering that immigration has dropped because there aren’t any jobs. The FSA can’t be paid off endlessly with Bernanke bucks. All this “foaming the runway for banks” has accomplished is more wealth inequality.

Who knows how it will play out? Maybe something as unthinkable as Democrats losing their segregation stand?

The evolution of “Democrat” as a party label is well documented. Suffice it to say that a Democrat in 1890 is NOT the same as a Democrat today. “Blue” refers more to a sentiment, and that has not changed so much. Even if immigration has dropped off, their kids are marching toward age 18.

The two-party system is and will be entrenched until the election process is replaced with runoffs, parliamentary votes, or some other system which is not winner-take-all.

‘a Democrat in 1890 is NOT the same as a Democrat today’

Whoa there, let’s not jump through so much history at once. We remember where George Wallace came from. We remember who it was that ran the segregationist camp. Remember the Dixiecrats?

But let’s not dwell on the sins of the distant past. How about those mass protests against GWB’s wars? How about the fight against warrant-less wiretapping the Democrats were so passionate about?

I’d say a Democrat today barely resembles a Democrat in 2008. Just look at Mr Kill List himself.

Good morning Lola.

Why? The Republican party is completely and solely responsible for the immigration cock-up we have right now in the US. So they can eat it raw for all I care. Let their consultants drain away the last dollar they’ve got.

“Nation of laws”, bwa-hah-hah-hah. Just a matter of time before the USA splits into separate countries. But then again, what goes around, comes around. The US has spent a good deal of its adventuring abroad dividing and (not) conquering.

Reagan had a chance to slam the border shut. He had a lot of political capital when he allowed the amnesty of illegal aliens. At that point, he could’ve used it to have immigration done properly–real border security, a workable situation for legal immigration, etc. He didn’t do it because big business didn’t want it. Now there’s a foothold across the entire southwest, where people who see themselves as Mexican-Americans (primarily) outnumber white Americans. It’s getting to the point where it’s going to be too late to have a real border and control immigration in any significant way. And against this backdrop, keep in mind, the people who PAY for GOP candidates to seek office… they do not want to see any restrictions. The GOP base might… but they need the Koch Brothers and others to fund the campaigns. So their representatives will only pretend to care.

“Just a matter of time before the USA splits into separate countries” Senator Jefferson Davis, 1860

Russia split up, why not the US? I think it’s a good idea. Time to end the misery for the rest of the planet.

Russia split up, why not the US? I think it’s a good idea.

USA is nothing like the USSR was. It’s like comparing apples with a pig’s nose. Besides, what would the “moocher” red states do without out all the blue state taxed federal money?

Taxing, Spending, Red States, and Blue States: The Political Economy of Redistribution in the US Federal System

Abstract:
Since 1984, states that receive the most federal spending per tax dollar that their citizens pay have voted increasingly for Republican presidential candidates. We explain the reason for this federal fiscal paradox.

(Paper presented at the annual meeting of the The Midwest Political Science Association, Palmer House Hilton, Chicago, Illinois, Apr 20, 2006)

http://citation.allacademic.com/meta/p_mla_apa_research_citation/1/3/8/4/5/p138457_index.html

Reagan had a chance to slam the border shut. He had a lot of political capital when he allowed the amnesty of illegal aliens. At that point, he could’ve used it to have immigration done properly–real border security, a workable situation for legal immigration, etc

The 1986 law which was a compromise with a Democratic congress had all the tools necessary to close the border. The fact that he did not see that future presidents were going to turn a blind eye to illegal immigration cannot make him the fall guy for the lack of enforcement during the Bush, Clinton and Bush II presidencies.

Joe, here is an excellent 2006 op-ed from Mazzoli and Simpson, the architects of the 1986 act. In short, Mazzoli and Simpson say that their 1986 had the same three pillars as modern reform. But securing the border was underfunded and ridiculed as a national ID, cracking down on employers was ridiculed as stifling the economy, and so selective legalization was the only thing that really happened, which is why people now think it was only about amnesty.

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/14/AR2006091401179.html

AQ Dan, I think we can fault Regan (or, let’s be honest, his advisors) for not slamming the door shut. He won a huge majority in ‘84 and was popular. He was giving away something very valuable (amnesty). When your hand is strongest, that’s when you play it. If he had wanted to secure the border, he could’ve done it. He could’ve stuck his neck out, gone to the people (over the heads of Congress), and at least tried to do some kind of secure border.

Obviously, he didn’t really want that, he felt the party should align with big business and be the party of wealth/prosperity. Ignoring that much of the prosperity was going to be on the backs of US citizens who now had to compete with labor and products streaming across the border.

Obviously, he didn’t really want that, he felt the party should align with big business and be the party of wealth/prosperity.

There is nothing obvious about it at all. Unlike this president he would compromise. The Democrats wanted amnesty and he wanted more secure borders. Many republicans did just want cheap labor, but the bill did have the mechanisms to stop it. Reagan passed a bill that could have been used to prevent the invasion.

If you are going to reach back in time and “blame” you need to blame Ted Kennedy, from Wilkipedia:

The 1965 act marked a radical break from the immigration policies of the past. The law as it stood then excluded Latin Americans, Asians and Africans and preferred northern and western Europeans over southern and eastern ones.[2] At the height of the civil rights movement of the 1960s the law was seen as an embarrassment by, among others, President John F. Kennedy, who called the then-quota-system “nearly intolerable”.[3] After Kennedy’s assassination, President Lyndon Johnson signed the bill at the foot of the Statue of Liberty as a symbolic gesture.

In order to convince the American people of the legislation’s merits, its proponents assured that passage would not influence America’s culture significantly. President Johnson called the bill “not a revolutionary bill. It does not affect the lives of millions”,[4] while Secretary of State Dean Rusk estimated only a few thousand Indian immigrants over the next five years, and other politicians, including Senator Ted Kennedy, hastened to reassure the populace that the demographic mix would not be affected; these assertions would later prove grossly inaccurate.[5]

The GOP base is split far worse than the Dem base. At least with the Dems, the upper-income whites are interested in “helping” the minorities to live better. So both factions overlap in that they both support the river of Free Sh!t, whether they are p-ing into it or drinking from it.

The GOP base is jokingly split into three factions with almost no overlap:
1) those who are still angry that they lost Vietnam
2) those who are still angry that they lost the Civil War
3) those who are still angry that they lost the Crusades.
Rove’s 2000 miracle was that he got all three factions to vote for the same guy.

they both support the river of Free Sh!t

There is no “Free Sh!t”. Look at the definition and our historical Constitutional goals as a nation.

free
/frē/ adv
without cost or payment.

Any “free sh!t” has come at a great cost to most all who receive it. The price paid is the redistribution of wealth, politics and opportunity from the most to the few. That is the cost.

When you combine this with our Constitutional goal of “Promote the General Welfare” and “Provide for Justice” we can see that the “Free Sh!t” comes with a price tag for those receiving it and is also the price paid for those charging for it.

The GOP base is jokingly split into three factions with almost no overlap:
1) those who are still angry that they lost Vietnam
2) those who are still angry that they lost the Civil War
3) those who are still angry that they lost the Crusades.

There is plenty of overlap between those groups. It may be a good joke but it has no basis in reality. If you are a Southern you probably fit all three groups. You are patriotic so you are angry about Vietnam, you are religious so you are angry that the crusades did not restore Christianity to a dominate position in the middle east and you may or not care about the Civil war but probably do.

Actually the Republican party does have three groups that do not overlap, Religious conservatives, libertarian conservatives and country club Republicans. The last two elections have been led by county club republicans with bones thrown to conservatives. Contrary to the conventional wisdom, I think a winning ticket minimizes the CC Republicans which tend to be moderate or liberal and a small part of the party and concentrates on winning Religious conservatives and libertarians. How do you reconcile these groups on such issues as gay rights? How about making the argument that Religious conservatives are better off with a limited government that does prevent gay marriage but does not require Religious conservatives from renting to marrying gay couples or any other forced economic relationship.

Keep letting the uneducated and the poor cross the border. You progressives will have to live in the same cesspool you helped create…and most of you will be unarmed. Good luck.

You progressives will have to live in the same cesspool you helped create…and most of you will be unarmed.

“Progressives” caused illegal immigration? In what fiction?

Why would real progressive, pro-labor, pro-Union patriots ever promote illegal immigration more than the “cheap-labor supply-siders”?

You might be armed (I’m so scared…not) But you are not armed with any facts.

“Here’s the issue that Rand has recognized:”

My objection was that Rand started with the lecturing spew after he kissed Jorge Pee Bush’s hindquarters in Texas. I never, EVER want to hear the Bush name in politics again. I never EVER want to see a Bush in office again. Paul can carry water for the Bush die-nasty all he wants, he’s just made himself irrelevant to me.

Permanent Democrat Supermajority

It worked out well for Detroit so I am sure it will work equally well for the country as a whole.

http://downtrend.com/jrc410/interesting-numbers-new-gallup-poll-shows-that-america-is-moving-more-decisively-to-the-right/

It appears that what Bush II giveth to the Democrats, Obama taketh away. Remember the thousand year Reich?

scdave meant to say “Rand”. I think Rand got in as one of those faux tea partiers, like Rubio. Both dropped the disguise pretty fast after they were safely elected.

Eff Rand Paul. Let him melt down. The GOP is toast anyway.

Such an uplifting post for a Monday there Downlow Joe.

This time next Monday, I’ll be skiing at Crested Butte:

http://www.skicb.com/

I can’t think of a better place to throw some money away with all this money I have left over after “throwing money away on rent” every month.

I will admit, I am jealous that you can do that as a day trip. Won’t it be crowded due to the federal holiday though?

Another pretty brutal assessment I just read on a law message board:

2,200 hours a year. And the prize? EVEN MORE PIE!

“Oh but the apartment is beautiful. The suits are fully-canvassed and tailored. You don’t look at the price tags on the shoes and ties you buy to complement them at Bergdorf. Your annual one week pilgrimage to St. Maartens is INCREDIBLE and you have to post the pictures to your timeline so people know you’re living and loving every minute of your life as a big time city lawyer. It’s a joke. Indentured servitude that will eventually be irreversible once your children, who you never see, are in boarding school and your loveless marriage achieves permanence after a calculated assessment of what it would cost to divorce your physically-deteriorating shrew of a wife. “

It’s not a daytrip Downlow Joe, it’s over 4 hours away.

We are carpooling and staying with friends in Gunnison. Interstate 70 west of Denver is to be avoided at all costs during peak ski season, especially on holiday weekends. Route US 285 isn’t bad, we will drive down Saturday night, ski 2 days and return Monday night.

I am jealous that you can do that as a day trip.

Day trips are rad.

2 hours outta Rio, mountains, nature, great food, mountain river pool and 10-15 degrees cooler. (But what’s with the Spanish music?)

http://pousadaparaisoacu.com.br/en/

2,200 hours a year … physically-deteriorating shrew of a wife.

This guy should go and just hang himself. What is he, a recent law school graduate adjusting to the so-called real world? He could always leave the big city and start a practice in a small town, doing wills and real estate. Better yet, leave the high-stress practive of law and get a job making french fries at McDonald’s.

Also, everyone deteriorates - men and women. Eventually the deterioration leads to death. That’s life.

As the failure of Obamanomics becomes more and more apparent, the left needs to try to undercut the true narrative that Reaganomics was very successful. As much growth in one year of Reaganomics as four years of Obamanomics does not speak well for Obamanomics.

Salon and Slate should just give it up and merge. Slaton.com

Reaganomics. Talk about beating a dead horse.

“2014 and counting……Reaganomics…….America’s living the dream.”

Talking Reaganomics is not “beating a dead horse” because the horse is very much alive. We are living with the consequences of embracing Supply-Side policies for 34 years.

With the exception of Clinton’s tax increase for the rich, Clinton doubled-down on the failed policy of trickle-down with his Repub partnership to deregulate the financial industry leading to the NASDAQ and later housing bubbles. W Bush doubled down again on Reaganomics. America’s experiment with voodoo economics has never ended.

Exposing Reaganomics as America’s 34 year failed experiment is not “beating a dead horse” but it is rather exposing the policies that have beat the sh!t out of the American economy.

“2014 and counting……Reaganomics…….America’s living the dream.”

Salon and Slate should just give it up…

But there is nothing there. Disparaging a source while ignoring the premise is not an argument.

But rather, it a genetic fallacy of irrelevance.

The genetic fallacy, also known as fallacy of origins, fallacy of virtue,[1] is a fallacy of irrelevance where a conclusion is suggested based solely on something or someone’s origin rather than its current meaning or context. This overlooks any difference to be found in the present situation, typically transferring the positive or negative esteem from the earlier context.

The fallacy therefore fails to assess the claim on its merit. The first criterion of a good argument is that the premises must have bearing on the truth or falsity of the claim in question.[2] Genetic accounts of an issue may be true, and they may help illuminate the reasons why the issue has assumed its present form, but they are irrelevant to its merits.[3] wiki

‘the nasty twinks over at salon and slate’

that is highly offensive to real journalists.

that Reaganomics was very successful.

Reagan was very successful at tripling the national debt.

Obama might only double it, and that’s with a tax base that 30 years of Reaganomics has decimated.

“34 years and counting……Reaganomics…….’Merica… livin’ the dream.”

jeebus, as if I was interested in engaging in some sort of debate. Snoooooozzzzzzzz. I need more coffee.

Obama might only double it, and that’s with a tax base that 30 years of Reaganomics has decimated.

Statistics may not lie but liars use statistics. Obama will have accumulated as much debt in his eight years as all the other presidents put together. The tripling of debt was from a much lower base and in the end there was very little increase of the debt to gdp ratio under Reagan while it has gone through the roof with Obama. You know that but you wish to deceive. Are you own Pelosi’s staff or for whom do you argue such garbage.

http://www.tradingeconomics.com/united-states/government-debt-to-gdp

Statistics may not lie but liars use statistics.

Was that intentionally foreshadowing your post?

Fact: Reagan tripled the national debt and sharply reversed a 35 year debt/gdp downtrend setting the USA on the failed Supply-Side path it continues today.

there was very little increase of the debt to gdp ratio under Reagan

That is totally false and too easily debunked. Look at this OMB numbers chart. Debt/GDP had been trended sharply down since WWII until Reagan. Look at the OMB chart. It’s the stats you won’t admit.

http://en.wikipedia.org/wiki/File:US_Federal_Debt_as_Percent_of_GDP_by_President.jpg

And also addressing Debt/GDP under Reagan:

National Debt Graph by President

http://zfacts.com/p/318.html

….(Beginning with Reagan) the supply-siders turned a 32-year winning streak into a debt disaster that continues to this day. For 20 years, under Reagan and the Bushes, the national debt increased compared to GDP every single year. In most other years it decreased. Twenty years in a row can’t be just an accident, but to understand you need to learn the voodoo strategy. (Why graph Debt / GDP ?)

….What about Obama? Notice how the debt accelerated during Bush’s last two budget years. Obama’s debt is a continuation of that trend and neither Bush nor Obama are directly responsible for that acceleration. It happened because of the recession. Bush set the all-time record by increasing the debt by $1.1 trillion in 100 days between July 30 and Nov 9, 2008—but that had little to do with his choices.

Recessions cut tax revenues—in this case, dramatically. That accounts for nearly half of the deficit. So blaming Obama for the full deficit is like blaming him for not raising the tax rate to keep tax revenues up.

According to your site, USA Debt/GDP increased from 32% to 50% under Reagan reversing a downtrend in debt/gdp since WWII.

USA debt/GDP had trended downward until Reagan’s supply-side polices (continued today) set us on the path of the debtor nation we are today.

According to your site, USA Debt/GDP increased from 32% to 50% under Reagan reversing a downtrend in debt/gdp since WWII.

Compared to Obama moving it to above 100% from 60% and not even having a real recovery. Never mind that Reagan won the cold war thereby allowing subsequent presidents to slash defense spending. All Obama is going to leave them with is the exploding costs of Obamacare.

Compared to Obama moving it to above 100% from 60% and not even having a real recovery.

USA will never have a “real recovery” ever if we continue 3 decades plus of your “Supply-Side” failure. Yawn. It’s proven math now, not 1980 theory. This is not a “dead horse”. This is our current realty.

From above:
What about Obama? Notice how the debt accelerated during Bush’s last two budget years. Obama’s debt is a continuation of that trend and neither Bush nor Obama are directly responsible for that acceleration. It happened because of the recession.

Obama’s debt is a continuation of that trend and neither Bush nor Obama are directly responsible for that acceleration. It happened because of the recession.

If Obama had created a real recovery under his stimulus plan like Reagan created with his economic plans, we would not have run up these deficits. Reagan had to fight both rampant inflation and a recession, inherited from Carter so stop with the whinny excuses. Obama is an epic fail and his poll numbers are starting to reflect this reality.

Reagan won the cold war

Right. Reagan, alone “won” the cold war. Just him in a vacuum - nothing before and nothing after. (As you describe every president’s administration - alone and in a vacuum of time.)

Your “logic” forgets about Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter.

(An example of more dogmatically driven simplistics.)

‘if we continue 3 decades plus of your “Supply-Side” failure.’

‘Yawn.’

That’s just what I was thinking!

If Obama had created a real recovery under his stimulus plan like Reagan created with his economic plans, we would not have run up these deficits.

How would we ever have not run up the deficits? How? they began skyrocketing under Reagan and went hyperbolic under Bush II. It’s math. You can stop math in it’s tracks? How?

Think about it. Trickle-down killed the US economy. Now, because of Supply-side tax cuts for the rich, even when the economy grows, it only “grows” for the very rich - and they are not taxed as they were under Reagan. Why? Because 30 years of Supply-Side false religion dogma has sheltered Reagan’s RichBoy Free Sh!t Army from the taxes most American’s pay.

A “growing” economy now only benefits the “free sh!t” sheltered rich.

Obama is an epic fail and his poll numbers are starting to reflect this reality

Obama’s “poll” numbers at the polls were an epic success - over 50% of the vote twice. Very rare. But keep whining you sour grapes.

You dedicate years of your life illuminating the housing bubble, while your fellow, formerly middle-class Americans slip into poverty, while at the same time the defining American economic policies of your entire adult life were to molly-coddle the rich at the expense of the rest of us? While they told us those same policies would enrich all of us, but they didn’t?

And it makes you ignore and yawn at such because of the politics?

No matter any of our politics, that is what happened. That is what we have reaped. Your center of attention of this blog - The Housing Bubble - was caused by the backwater unintended consequences of failed Supply-Side economics. This is the core of America’s current failure to its citizens.

‘Obama’s “poll” numbers at the polls were an epic success’

By that logic, George Bush got elected twice and therefore was an epic success too.

‘it makes you ignore and yawn at such because of the politics’

No, because it’s boring.

No, because it’s boring.

How can addressing the greatest American macro-economic event relating to the Housing Bubble be boring? Like it’s talked about all the time on this blog? Not even.

What many believe to be the central cause of the housing bubble and America’s current 30 year downward spiral - (Supply-side’s worshiping the rich) - is “boring”?

How can that be boring compared to what’s talked about all the time here?

Is blaming the housing bubble on “lazy” “free sh!t” Americans boring?

Is blaming it on “shifty blacks and minorities” couched in code-words boring?

Is blaming it on banks and realtors and loan officers boring?

Those are all small-ball destraction compare to what’s really happened imo. And that’s not boring.

I’ve said before that IMO the dominant economic policy today is central bank-ism. Our problems are rooted in globalism, which is promoted through the central banks. It’s either true, or it’s not. And I don’t go on about it because that would be boring too.

Lola is a paid shill. Should go back to being banned or will be soon enough, again.

the dominant economic policy today is central bank-ism. Our problems are rooted in globalism

Yes, a lot of it. And central bank-ism got its main boost in our lifetimes under Reagan - by pushing Volker out and inserting Greenspan.

And along with inserting the worst central banker in American history - (Greenspan) (imo), globalization began to take off under Reagan because globalization is a tool for the rich to get richer at our expense, which is a main aspect of “Supply-Side”.

Lola is a paid shill. Should go back to being banned

And who are you “Ronnie’sLeftMango”? Are you HA? I’ve been away for 2 months making good. And I’m still in your head enough for you to make that handle 2 months in my absence? Weird.

Funny, but you’re a sick man as many have said. I’ve never been banned, but your new “Ronnie” handle is on “ignore” now as is your HA. You have bad karma. You have bummer vibes. Sick. Sorry
Peace.

Must’ve been pre-90s.

Regardless, if I was talking to my neighbor and I was in a terrible situation, I’d just explain that “We bought the house in 2006, it’s worth $100k less now, I want to save for retirement or my kid’s college so we’re going to let the bank have the house.”

What’s the big deal? Even conservatives like Dave Ramsey say this. It’s more important to take care of yourself and your family than keep up some pathetic facade.

Yes, you would be a loser if you lost _your_ house. But a house that you owe hundreds of thousands on (before interest) isn’t even close to being _your_ house.

TL;DR version — You’re applying moral judgments to something that is no longer a moral issue. People don’t make the rules, banks and GSE’s do. Banks and GSE’s work on one incentive structure and only a fool would operate as if they were in some alternative 1950s-style universe.

We bought the house in 2006, it’s worth $100k less now, I want to save for retirement or my kid’s college so we’re going to let the bank have the house.

Try this: “I been here for 28 years, but the evil bank bank forced me to sign this predatory re-fi in 2006, they won’t give me my mod, now they’re going to take my house from us those b@stards, and the state’s HARP isn’t giving me enuf. I’m gonna sue to get my house for free.”

At which point in the background you will see the POD rolling up the driveway, reminiscient of Sarah “Turkey Pardon” Palin.

“back in the day when your neighbors actually talked to you…”

That phrase is reason enough not to buy a house in a subdivision. You should know who all your neighbors are and if any of them are indecent, you should pass on that neighborhood.

Shamefully people gamble $hundreds of thousands on a house without realizing their next door neighbor is a molester, the ones across the street are on food stamps and selling drugs, and the ones in back blast cRAP “music.”

OK, but you’ve invented a fabulous new dance and I do have to commend you for that. It’s the “Reaganaca”!

Come on baybee, do the Reaganaca!

Now, what i wants ta know, what sort of beat do you do the Reaganaca to, is it a samba?

“when someone effectively argues points that you disagree with,”

You send the IRS after them.

a fabulous new dance…It’s the “Reaganaca”!

You forgot one important letter.

USA is dancing the “ReaganCaca”

Urban dictionalry : caca. spanish/(portuguese) word for “a crap”.

“You send the IRS after them.”

Then you have the IRS person you sent say they did nothing wrong and plead the Fifth.

Reagan + ACA = Reaganaca, the dance that you do on this blog.

But I have to agree, it’s all caca.

what sort of beat do you do the Reaganaca to, is it a samba?

The “ReaganCaca” dance: (”Caca” is Spanish/Portuguese for “Cr@p”)

The “ReaganCaca” is a coriographed dance troupe show that begins with the all the dancers happy and doing an upbeat 20’s type Charleston dance. After awhile, the dancers begin to divide by represented socio-economic and ethnic factors into distinct groups with more and more white people joining the increasingly sadder dancing representing poorer people.

The “ReaganCaca” final act consists of the rich 1% of the dance troupe engaged in a wild and raucous hedonistic climax of joy while pointing and laughing at the 99% of the dance troupe that has now has almost stopped dancing altogether.

The “ReaganCaca” ends with 99% of the head-bowed dance troupe marching slowly off the stage to the sound of a lone bagpipe playing a funeral dirge leaving the 1% to party on.

Spending time on the HBB will never make you seem like a real realtoR. Don’t you have work to do? There’s a frenzy out there!

I have 3,796 followers on Twitter.

How many followers do you have?

Yeah, I thought so.

The only thing following you around is a bag of fleas. We can smell you from our IP locations!

The only thing following you around is a bag of fleas. We can smell you from our IP locations!

Now that’s funny!

If I extend my analysis to assume that the participation rate goes up by 5% also for people in the 60-64 year age cohort, then you need to add 83k jobs per month.

Forget about the 51% going to 55%. That’s not important.

What is important that when someone is 55, their probability of being in the labor force is about 72%. When they turn 60, their probability falls to 55%, and at 65, their probability falls to 32%. Over a decade, you lost 40 points of participation. Whether 51% is instead 55%, and 32% becomes 37% is immaterial, you still lose about half of those participating in the labor force.

This transition to retirement was true in the past. However, in prior eras, the number of people moving from one category to the next was much different.

In 2000, there were 13.4MM people in the 55-59 category, and 19.2MM under the age of 5.

In 2010, there were 19.6MM people in the 55-59 category, and 20.2MM under the age of 5.

In 2020, there will be approximately 22.2MM people in the 55-59 category, and ?? under the age of 5.

While I’m willing to bet that number under the age of 5 is approximately 20 million, we can’t know. However, we DO know the size of each 5-year ago cohort up to 20 years old as of 2010 (the people who will be entering the labor force from 2010-2030).

Those cohorts as of 2010 were:

Under 5: 20.2MM
5-9: 20.3MM
10-14: 20.7MM
15-19: 20.0MM

The same number of people (roughly) entering the workforce as compared to history, combined with a lot more people leaving the workforce as compared to history, leads to slower labor force growth than history.

Again, I’m not talking about labor force shrinkage, but the participation rate falling as a greater percentage of our population is over 65.

Percentage in major cohorts per the census in 2000:

Under 20: 28.6%
20-64: 59%
65+: 12.4%

Per 2010 (earliest boomers turned 64 this year):

Under 20: 26.5%
20-64: 60.4%
65+: 13.1%

Assuming the constants I noted for my 2020 projections:

Under 20: 24.9%
20-64: 58.6%
65+: 16.5%

And 2030 (harder to predict, but still valid to do the math)

Under 20: 23.6%
20-64: 56.3%
65+: 20.1%

REIC shill, “we” snooze.

Lesson learned: Real-estate is an income investment. It is not a growth investment. Speculation is just gambling.

Again, with the assumptions.

Let me just say that your assumptions about the employer/employee and fund/investor relationships are not even close to accurate.

You tell me, if your original plan was to:

1. buy homes on a distressed basis (foreclosures and short sales) to rent them out;
2. finance them;
3. collect cash flow while the market moved with inflation (up a few percent per year); and
4. after 4-5 years, sell the portfolio, either in bulk, or individually

However, instead of an inflation-like move in prices, after leasing and financing the homes, you got a crazy 20%+ rate of appreciation, what would YOU do?

1. Sit and assume the 20% continues for a the full expected original duration of your investment, and not adjust the timing of the exit?

Or

2. Assume that 20% will moderate to a much lower level, and we get into a more regular type of real estate cycle, and not adjust the timing of the exit?

Or

3. Assume that 20% could go on longer than #2, and could end badly if it goes on for too long (with too long being 2-3 years), and adjust the plan to begin selling earlier than originally expected?

I think that #1 is a dream.
I think that #2 is a possibility since lenders haven’t gone crazy issuing NINJA loans/Option ARMs, etc.
I believe that with very low new home starts in the markets in which we own homes, combined with the Fed stance, that #3 is too great a possibility to sit on our hands and not adjust our original plan. My partners agree.

What would you assume? Why are you NOT selling the Joshua Tree portfolio homes? If you had a non-indefinite time horizon, would you choose to sell earlier?

I think the reason why Ben is not selling the houses is that he is already getting double-digit returns on the RENT, and that will continue forever. If he sold them now, then the money that’s currently invested would have to find a better place to live, but there isn’t a better place for it to live. If he sells them now, then he gets the appreciation today, but gives up the rents tomorrow. If he could be guaranteed a second crash (as big as the last crash), then he would sell them and buy twice as many later with the money, but that would be sorta like gambling. He thinks there will probably be another crash, but a bird in the hand is better than two in the bush. That’s what someone on this blog told me the other week. Disclaimer: I don’t speak for Ben; his reasons might be different than what I think.

Your employer represents a different situation from the JTF. Your employer did not buy the houses with cash, it does not have an unlimited time horizon, and I don’t think it bought houses for nearly as good of a deal. This is how your employer is similar to Blackstone, and this is the reason that all the other investors will have to get out at the same time as you guys. The financial “innovation” that enabled y’all to leverage with lots of OPM is the same innovation that makes you have a finite holding period. Nobody ever agreed to buy and hold to begin with. The plan was always to buy and sell.

And the assumptions that I am making about the relationships you mention are all based on the limited information that you have been leaking out to us. I wish you tell us more.

When Blackstone exits their strategy, they will be selling shares in the company that owns the homes…NOT the homes. That is a pretty big difference between us and them (a large difference).

We bought for cash, and only borrowed money after the homes were fixed and leased.

The one step that Ben did not take is borrowing money on the property once it was leased. What makes Ben’s use of your investment $ different than ours…aren’t you the OPM in that case?

While we do have OPM, we are major investors alongside them…we have A LOT of skin in the game, and as such are not operating in a “heads, we win, tails you lose” structure.

Ultimately, there were three kinds of groups that bought homes to rent them out:

1. One-off investors…they are likely the type to hold much longer term.
2. Gargantuan funds with institutional equity backing…they are likely the type to take their entity public, but NOT resell the homes into the market. While they will exit the strategy, on the ground the properties will remain rentals.
3. Much portfolio holdings, where the likely exit is one-off sales.

#3 is the competitor for us when we sell. And candidly, I don’t think there are very many of us.

Should be “Much smaller portfolio…” sheesh…long day, after a long night.

Rental Watch:

The trouble is that Blackstone borrowed about 1/2 of its money from a bank, and the loan is due this year. The other trouble is that they are not making a profit from their rents. They will be forced to sell when their OP (the bank) wants its money back, but they can’t get enough bondholders to replace the bank loan. Also, they did not buy those houses with the intent to rent them out. They just did that because they couldn’t sell them, so they changed their strategy, but now that isn’t working out very well either. If your company gets out now, then yes, you will probably beat Blackstone to the punch. However, your company is still a great example of all the investment companies out there that bought properties for too much money to make a justifiably high return on the rent, and must sell soon.

The only difference between Blackstone and Ben is that Ben only works for a percentage of the profit. If I don’t make money, then he doesn’t make money. Blackstone charges fees. Then there is the little thing where Ben didn’t leverage the investment money. Something about fees and interest and putting the houses up for collateral. Adding leverage also adds risk.

You are the OPM with a different economic structure. Ben is leveraging your investment. You don’t need to tell me, but the big guys generally earn 2% and 20%. I’ve seen some cases where the manager agrees to a lower than 2% fee in exchange for a greater than 20% participation.

IIRC, you said a long time ago that you have a right to have Ben sell the house in your agreement. Let me ask you this, would you have invested if you didn’t have that right?

If you are going to be OPM, there are two options for you to get comfortable giving money to someone else:

1. You have a right to force the sale of the underlying asset. While the hold period is indefinite otherwise, you have a way out at your election; or

2. You do NOT have the right to force a sale, but there is a targeted end to a fund, which gives you a soft outside date for the assets being sold.

We chose #2 because we wanted the exit timeframe control. Our investors trust us enough to give us that right.

I find your analysis of Blackstone’s strategy interesting…where did you get the information? That is not my understanding of what had happened.

FYI, we purchased our homes with the intent to rent them out.

I don’t have a right to make Ben sell a house. I have a right to the return of my principal with a certain amount of notice, but he would just get another investor to replace me in that case. It would be easy for him because his returns are very competitive. Way better than Blackstone. If his returns were not competitive, then yeah, he would sell a house, and there would be profit right now.

I got my analysis of Blackstone’s scatter-brained strategy by reading as many articles as I could about it. They are cagey, but you can stitch together a lot of facts from disjointed press releases and interviews done with different people at Blackstone over time. You can see the way they initially sold their fund one way, and then suddenly started selling it another way. It’s like The Lost; they started off with a clear path, but now they are making it up as they go along. They got a $5 billion loan on one paper from multiple investment banks. Then they also got $5 billion from somewhere else (I think shareholders). They only spent $8 billion before they started broadcasting that they can’ buy any more houses because they’re too expensive.

Now they got their subsidiary (Invitation Homes) to buy $500MM of houses, and Invitation Homes is trying to sell bonds against the rental income (not the deeds) of those houses. Nobody cares if Invitation Homes goes bankrupt. It’s just an attempt to get enough bond holders to satisfy the bank loan. Otherwise, they have to try to refinance, and their interest rate will go up IF they can get the bank to refi the loan.

They bought more houses in Phoenix than anywhere else, and they caused a HUGE bubble. A bubble for themselves. They’re trapped in it now. They have a gigantic vacancy rate, and former employees of Invitation Homes have given interviews saying that the company is buried with maintenance and vacancy problems. They underestimated what it would take.

I see Invitation Homes for rent everywhere around here. Blackstone is retarded; they are letting people in with bad credit, lower-than-market rents, and super-low deposits. I would rent an Invitation Home, but they are mostly big houses, and I’m in bunking in The Pod right now, living in two cities.

You guys purchased your homes with the intent to rent them out for 4-5 years, but then sell them. Ben will sell them if he wants, but his intent is to rent them out. Actually, he initially intended to sell them, but the returns on the rent just happened to be too good to justify selling. The opposite of your scenario, and the opposite of what he was expecting.

I kind of feel like I’ve gotten into a fight with you about your investment strategy, but that wasn’t what I meant to do. I just meant to illustrate how lotsa lotsa companies are gonna be selling soon, mainly because they have finite time horizons. Blackstone literally has a deadline because of the bank loan, but you will sell because you know it’s the best move for you right now, and your rents probably aren’t nearly as high on a percentage basis.