The Housing Bubble

HEEHAW!!!

Renting money from a bank will never feel like real wealth.

“Living in a rental will never feel like a real home.”

Amanda Michel
theguardian.com,
Tuesday 29 May 2012

Ursula, New Jersey – facing foreclosure for 25 months

It has been incredibly stressful. I am on antidepressants, antipsychotics, antianxiety medicine. I see a psychiatrist but all the medical expenses add to the stress. I’ve moved out of the home twice, but came back because the house is still there. It’s the biggest burden/nightmare and I see no end in it. I have no plans of where I am moving, I am in limbo. It’s destroyed my life.

Liz, Georgia – facing foreclosure for 28 months

It is a constant fear. It impacts every decision I make both large and small. I have no debt other than a mortgage. Am I supposed to file for bankruptcy? I’m a single mother. The boys have been alerted that we may be moving because I didn’t want a change to be abrupt, but that has been going on for a year and a half. Where will we be moving? When? What school are we going to next year? All I can say is, I don’t know yet. It’s an ongoing stress for all three of us.

Karen, Missouri – faced foreclosure for two years before losing home

We feel that our life has been taken from us. We are too old to get a loan for another place of our own to live and the feeling of failure has just about done my husband in. We owned our real estate for close to 35 years and then, because of my illness and disability and the fact that they would not work with us, has ruined our lives.

Carol, Texas – faced foreclosure for 60 months

I have been in a severe state of depression PTS for the past two and a half years. I have bouts of extreme anger, contemplated getting a gun to protect my property as city officials and lawyers and judges are in the pocket of the bank. I have not got a gun, needless to say the thought has crossed my mind. If it weren’t for people who love me and depend on me that would have been my solution. As it is I get by day to day in terror of a man with a badge and a gun coming to my home and throwing everything I own out in the street.

Laura, California – faced foreclosure for 31 months

I have gone to therapy, started taking yoga classes, and ended up being referred to a psychiatrist for antidepressants, which have helped. I have horrible insomnia, and end up writing letters at 2, 3, 4 in the morning. Not getting much sleep as taken a toll on my job, with only 3-4 hours a sleep each night, I was irritable and tired. I work at a prison, and needed to be on full alert. My doctor put me on stress leave because the foreclosure was taking such a toll on my mental and physical health. I had to file a grievance with my legal plan because they said they couldn’t locate another lawyer. Finally, I was able to secure a lawyer and we are still fighting the fraudclosure. We have a settlement conference on May 30, 2012.

Ludy, California – faced foreclosure for 60 months before losing home

Everyday is an agony. Undue hardship of sleeping and waking up in the morning knowing that the problem still exists has a devastating effect emotionally and physically. I spent lots of attorney’s fees and court costs to save our house from foreclosure. I even filed bankruptcy and have undergone five long years of fighting in court to save our house.

Jeanette, Indiana – faced foreclosure for 48 months

My foreclosure has not impacted my family much, it was only me and husband to begin with and then he passed away in 2007. Albeit, it has emotionally, financially and spiritually destroyed me. I’m not a widow, homeowner or human being, I’ve been reduced to a statistical number owned by BOA, FICO, etc. The entire experience has changed my life forever. My life will never be the same.

Jody, Michigan – facing foreclosure for 29 months

I once lived nearly an entire week on Cheetohs. After finding a new job last year, my boyfriend now earns enough that we can afford vegetables. I have come to love even brussel sprouts.

http://www.theguardian.com/commentisfree/2012/may/29/us-foreclosures-peoples-panel - 133k

Most people will wait till you die or move to florida and get your house, a lot will sell to pay off the debt So the parents will pay off a lot of the debt..indirectly

I see it on the street where i was raised kids move back home and parents die they still live there…

———–
There should be no welfare (only workfare, as in you want money, pitch in, take a drug test, show up for what ever society needs, if you want society to pay your way).
——————

This is a BIG PROBLEM Jingle…..It’s Punitive they way it’s done today.., nasty filthy disgusting…….

I can understand if you are a HS dropout and do manual labor…but lots of people have skills that are going to wasted..

I keep giving the example If I collected welfare I would be glad to work say 20 hours a week at the Public defenders office as a paralegal….It would sharpen my skills and have a real job in my filed at the top of the resume which employers like to see today………..but to work in the parks dept shoveling snow gutting grass planting trees while worthwhile….would do nothing to help get a job back in your field of work.

Really what it will do is ensure that only the rich can go to school. I worked my way through undergrad and most of grad school plus I saved money in high school that i put toward my own education.

However instead of concluding g that because I could do it so could everyone else instead I realized that I have a drive and capacity for perseverence that is not matched by many people. No one I knew did what I did to get through school and even I had the advantage of student loans that I didn’t have to start Paying off til after I graduated.

What we need to do is tax the rich more and rescind the capital gains exclusions on the sale of a house that encouraged people to buy more house than they could afford in the first place and use those tax dollars to fund free college education

Those that I know of that did find work in their field started at $70K or above.

Maybe in Silicon Valley. I routinely see SW engineer jobs advertised out here, that pay 70K for EXPERIENCED engineers, not for rookies. And the laundry list of requirements is as long as your arm.

I see big ads at Sh***bank (and others) all the time desperate for help….must speak some foreign language other then Spanish……

Us English only peeps won’t even get an interview

My company is hiring new grads at close to $100k/yr. We’re not in Silly Valley.

Interesting how it almost seems in lock step with the rise in crude oil prices.

Yup! Got popcorn? (Where’s Neil?)

Let’s hear it.

I’m not oxide but what the heck I’ll respond with my own situation.

1) Current value vs. purchase price?

Zillow this morning claims $161578
April 2000 I paid $130250

2) Current cost (PITI) vs renting today?

PITI is pointless because I have to maintain this place.

None the less assuming 5% down $1077 for 30 yr fixed 5% down
vs
zillow rental estimate of exactly $1283

So I’m “saving” $206 per month. Pure LOL moment as HD just gave us a quote for a new roof of almost exactly the same cost as my new car. So thats 8.1 years of maint budget for nothing but the roof. Also we need a new $3K driveway like this year. And the garage is falling apart. “good” news is brand new HVAC system and some major appliances.

3) Current loan balance vs original loan balance?

Originally $125 now around $100. Had to refinance to pay for the completely new HVAC system and some considerable plumbing and some other stuff. Now that I think about it I’m not sure what plumbing and wiring is still “stock” from 1960 after all that work.

We may end up having to refi again, god help us, to pay for the new roof. On one hand I could pay for it. On the other hand I need the liquidity. On the other hand the fees are expensive, not so much the interest rate. The purpose of real estate is to keep the middle class in perpetual debt bondage to make rich bankers richer, which is pissing me off.

4) Your personal level of satisfaction with buying?

Very low. Sick of being a part time peasant, sick of being a debt slave, sick of throwing money away on a house. Once the kids graduate from grade school we’re renting in the same school district. Maybe sooner. I rented before we got married and moved in together so its not like its an unknown quantity. A decent bachelor pad in a really nice area was about $550/mo… in 2000. According to zillow a decent house in a really nice area is about $1300/mo, which would save us a lot of money over “owning”.

I make a little over $70K personally when I’m employed (like now). My wife, when she’s employed (not like now) makes about $50K. So under ideal conditions the last line on the 1040 is around $130K/yr due to investment income and the like, although occasionally only 5 digits. This year will probably only be 5 digits, but we’re OK at that. Boo hoo, instead of making about three times the median household income we’re only going to pull in about twice the median household income, I can still deal with that. The point of this is we’re high enough income, most of the time, to make renting money from the bank to “own” a house on land we rent from .gov an incredibly wasteful, yet affordable, extra luxury. Somebody only making $40K would be a moron to buy a house. Unfortunately $40K is about median household income in this area, so about half the population would be morons to “buy” a house. I guess there are stupider ways to waste our unusually high income, but not many.

As far as day to day feelings, I hate being a feudal peasant. I was shoveling and snowblowing yesterday, which I wouldn’t have to do at my old apartment. I don’t find peasant work to be fulfilling, although I know some people love it like a holy obligation. The last day in my life I pick up a snow shovel or do house repair work will be a good day.

5) Year of purchase?

See above late april 2000

6) Would you do the same thing again, or would you buy earlier, later or not at all?

As usual for real estate, this was not a carefully reasoned financial decision, was part of our marriage plan and according to estrogen hormone, babies cannot be squirted out in a rental for no apparent logical reason, etc.

Its not been the worst disaster in our lives (thinking of dead relatives, etc) but its not exactly something to brag about either. Shrug shoulders, say “probably not”.

Hi Jingle. I bought in early 2012. The purchase price was equal to the tax assessment of the time.

Since I bought, my house Zestimate increased 20%. My tax assessment increaesd 2%. My guess is that a real purchase price would be 8-9% higher. I can’t gauge anything based on comps because the houses in my neighborhood have been modified (or not modified) greatly since they were built. Condition alone can make a 15% price difference.

When I bought, my PITI was $500 less than my rent for an equivalent place. The differential is probably a little higher now. I can’t use advertised rents as a comparison because those are first-year rents. Real rent jump after the first year.

I put 10% down on the house. Since then, I’ve paid off an additional 8% on the mortgage amount and saved some interest on the back end.

Did I like buying? Yes, but that’s because I know that job is stable enough that I will likely not have to move. I really like not getting a renewal notice in the mail.

Would I buy now? That’s a good question. I haven’t thought of it.

I want to play, too. Those of you from way back when will remember when I really wanted to buy a house. Here are my answers:

1) Current value vs. purchase price?
Current value approx. the same as purchase price ($240,000). I bought in May 2010.

2) Current cost (PITI) vs renting today?
PITI is $1200 vs. ~$1600 if I were renting it

3) Current loan balance vs original loan balance?
$170,000 vs. $180,000

4) Your personal level of satisfaction with buying?
Mixed. Love the neighborhood. My son loves the house. I don’t love the house because it is just a lot of work. I like it, don’t love it. My plan has always been to live here while my son is in school, then move to either a townhouse or a rental somewhere else when he graduates and I can leave the district without feeling guilty. I called the plan, “My 12 year plan”. It’s now my 8.5 year plan.

5) Year of purchase?
2010

6) Would you do the same thing again, or would you buy earlier, later or not at all?
I would buy again, but my wish list would be different.

“I always wondered why there weren’t more leapers this time around”

Follow the money. The folks you’re expecting to be leapers have it all. Therefore not much leaping this time around. Not yet, anyway.

I worked for a family firm once,
where the Grandpa (the guy who took the firm to new heights) had a terminal illness, so he jumped out of a high rise window on Wilshire Blvd during lunch time. I thought that was an awful thing to do to others. Can you imagine the trauma he caused.

seems like a nightmare waiting to happen in much of the southwest

And as the southwest becomes saturated, they will be coming your way and in greater numbers.

Goon, it’s un-American to suggest that riding solo in a 2.5-3 ton automobile is dumb. A “real journalist” would know that your daily commute is a chance to show off your powers of consumption. The ideal commuter car shows off your values and style. If you’re going to drive a couple thousand miles a month, might as well spend a $hitload of money to dull the pain.

james howard kunstler

Jim is a wordsmith, I’ll give him that.
Brilliant writer. I have to have a dictionary nearby. And his ability to phrase is remarkable.

Yup, we’ll have to make our own stuff again. Imagine that. People getting off of welfare and once again making shoes, furniture, appliances, clothes, etc. When that happens, who will buy all the cr@p the cesspool countries need to export?

And that was my opinion of him too. He’s right on that one point though.

Stay on topic Liberace…

Drown it in the bathtub

Proceed….

“unable to do high level thinking and look beyond cherry-picked data”

Is that the Alexa profile of the Drudge Report reader demographic?

LOLZ

So there’s no benefit in having contractors do something that federal employees could do. It just costs more, sometimes a lot more. I wouldn’t think that high level thinking would be required to understand this.

Grover also has the benefit of funding from the giant corporations whose interests he promotes.

Feb. 17, 2014, 8:35 a.m. EST
Fog over U.S. economy unlikely to lift soon
Terrible weather masks whether growth is stable or deteriorating
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — Trying to figure out what the heck is going on in the economy right now is like driving in a fog. You can only see a few yards ahead before visibility ends.

The road being taken by the economy, of course, has not been concealed merely by a vapor mist. The nation has repeatedly been slammed over the past two months by major snow storms, cold fronts and even polar vortexes (whoever heard of that term before this year?)

Maybe the economy is doing all right, or perhaps it’s suffered another setback, but nobody really knows.

“The weather doesn’t just clog traffic, it clogs the economic data,” said Lawrence Creatura, portfolio manager at Federated Investors. “You just don’t know if this is indicative of what’s going on in the broader economy.”
…
Weather still the story

Early reports for January suggest that poor weather disrupted the operations of manufacturers and the problems may have carried over in the February.

The Empire State index produced by the New York Federal Reserve is likely to fall slightly, according to economists polled by MarketWatch. The report comes out Tuesday morning.

The New York region, like much of the Northeast, has been swathed in snow and ice for much of the new year. And a similar manufacturing reported issued Thursday by the Philadelphia Fed might also be susceptible to weather-induced weakness.
…

Homebuilder Confidence in U.S. Slumped in February on Weather
By Michelle Jamrisko
Feb 18, 2014 7:00 AM PT

Confidence among U.S. homebuilders plunged in February by the most on record as bad weather limited prospective buyer traffic and depressed sales.

The National Association of Home Builders/Wells Fargo sentiment gauge slumped to 46 this month from 56 in January, figures from the Washington-based group showed today. Readings less than 50 mean more respondents reported poor market conditions than good. The measure was weaker than the most pessimistic projection in a Bloomberg survey of economists.

Snowstorms last week from the South to the Northeast helped reduce homebuyer traffic to its slowest pace since April. Purchases and sales expectations also declined as builder confidence deteriorated from coast to coast, signaling construction will contribute less to economic growth at the start of 2014.

“Significant weather conditions across most of the country led to a decline in buyer traffic last month,” NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Delaware, said in a statement. “Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.”
…

Feb. 18, 2014, 10:20 a.m. EST
Brutal weather chills home-builder confidence
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Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion
Gold flat after weak Empire State data

The National Association of Home Builders blames severe weather for the biggest drop in the builder confidence survey’s history.

Excerpt:

The “general business conditions” component of the index is based on a distinct question posed on the Empire State Manufacturing Survey, and is not a weighted average of the other indicators. These 11 indicators, which are only applicable to the survey respondents’ manufacturing facilities in New York State, include the following – new orders, shipments, unfilled orders, delivery time, inventories, prices paid, prices received, number of employees including contract workers, average employee work week, technology spending and capital expenditures. Each index is seasonally adjusted when seasonality is detected.

Having lived in the same state for 40 years, I assure you the recent “crisis” was considered “normal weather” in the 80s. Its supposed to be -20 below for days at a time, its Wisconsin for gods sake. Or at least that’s how it used to be…

I guarantee that in a couple decades, some February, some quisling party official talking point will be to mockingly ask “where’s your global warming now?” when a rare once in a decade sudden frost threatens northern Wisconsin’s winter banana and orange crop. From my limited farming knowledge northern wisconsin soil will be better for orange trees than bananas, but whatever.

I also guarantee that in many centuries, where I’m sitting right now, there will be a two mile tall glacier, much has happened many times in the recent geologic past and will eternally happen in the future.

The climate, never having been constant in the past, is unlikely to be constant in the future. So there seems little point in either trying to control it or to pretend that it should be constant, other than the usual PTB elite divide and conqueror distraction wedge issue.

BTW, NASA will probably claim a record year this year judging by its data it has recently been publishing. Its ground base data is widely in conflict with the satellite data but it does not seem to care, it is going to support the administration’s push.

To make matter worse, bitcoin’s price now is almost half of what it was at its peak.

Is this not like the typical mainstream media penchant for “Higher prices = good, lower prices = bad” when discussing housing or any trade-able asset?

Detroit’s death was written in stone decades ago. A combination of suburban development and population migration to the suburbs in the 1950’s, the Race riots of 1967, and increased white flight from Detroit after the race riots and due in part to integrated schools and affirmative action in education. All led to a shrinking tax base. Labor unions exasperated the lack of a tax base to bring Detroit to bankruptcy.

The Fords (non diesel) have Euro-sissy overhead cam engines. GM trucks still have manly pushrod engines.

“Hoarders” save their money in the bank. By contrast, gold buyers are “investors.”

They don’t get it because they don’t want to get it. I’m sure that when the Czar and his family were facing the firing squad that he still didn’t get it.

All this has happened before and it will happen again.

When that happens, rebar and bags of cement becomes the defacto currency.

Yep, I know that. But this is the second call I’ve gotten from this mortgage company in the last six months.

And, as we all know, the refi business has been dropping like a stone for quite some time. Which means that the mortgage company is desperate for someone! anyone! to be interested in a refi.

Me? I’d refi when hell freezes over. The banks charge all sorts of closing costs — including those that aren’t necessary — and I’m not interested in playing that game.

Gross and Fine Motor Skills
Students with Asperger’s Syndrome

I was wondering myself. My daughter has many characteristics of Asperger’s Syndrome (diagnosed as sub-clinical). She’s a great kid, but it’s not as funny as portrayed on television and movies.

False Flag

Oh wait — seems I already have the answer right here!

Economic eyes again turn to the Baltic Dry Index
Carlos Carrion/AFP/Getty Images
A cargo ship being loaded with wheat in 2008, when freight shipping prices for transporting dry raw materials were languishing close to their lowest level in 25 years. The Baltic Dry Index, a key barometer which tracks the cost of renting ships to move goods, such as coal, iron ore and grain, across the oceans, tumbled then to 647 points.
by Stephen Beard
February 18, 2014 - 3:39pm

Remember the Baltic Dry Index? It’s a key shipping market index that leapt to prominence five years ago in the wake of the Lehman Brothers collapse. Then, the Index dropped like a stone, presaging that world trade would fall off a cliff.

But should we be fretting that the Baltic Dry Index is tanking again today?

“In theory, we should be quite worried,” says David Osler, Financial Editor of the Lloyd’s List maritime business newspaper. “The Index has halved since the end of last year — the sharpest January fall for 30 years. This could be telling us something unpleasant about the world economy.”

The Index is compiled in London by the Baltic Exchange, the world’s biggest source of maritime market information. It records the cost of shipping dry, bulk commodities, like iron ore, coal, and grain.

A sharp fall in the Index could therefore predict a global slowdown. But not necessarily. The world’s biggest importers of raw materials have been on holiday.

“Chinese New Year is always quiet,” says Jeremy Penn, who runs the Baltic Exchange. “This year, Chinese New Year has come very early. So you have a natural hiatus in the market.”

And there’s another reason for thinking that the big drop in the Baltic Dry Index may not be as menacing as it seems. The cost of shipping reflects not only the demand for raw materials, but also the supply of ships. Amir Alizandeh of the Cass Business School has been studying the accuracy of the Index as an economic predictor.

“If you have too many ships around, then this will result in a drop in the index,” he says. “And that’s the situation at the moment: We have too many ships chasing not enough cargoes.”

The economic boom that preceded the collapse of Lehman Brothers had triggered a ship-building frenzy. All those extra ships have now been delivered, and the world has 60 percent more bulk carrying vessels than it needs.

But the world remains nervous. Economic recovery appears fragile. Here’s a safe prediction: Economists and investors will continue to keep a wary eye on the Baltic Dry Index.

The real BDI story is seen on this graph. In Fall 2008, the index dropped from a level above 12,000 to a level below 1,000 over a period of a couple of months. The recent action that saw a baby recovery up to a level near 2,000 before a collapse back to circa 1,000 is a story of never, ever coming anywhere near recovery from the Fall 2008 collapse.