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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Renting is just throwing money away every month.
Buying a home is a fast track to foreclosure and financial ruin.
Renting is a fast track to empty your bank account and make your landlord rich.
I suppose housing is less expensive if you elect to default on a mortgage and live rent-free forever.
I’m paying my landlord about half what he’s paying the bank.
My tenant’s are paying me $$$$$$$$$ my homes are paid off.
My landlord can’t afford to buy a refrigerator.
My last landlord was getting 1/355 per month based on what the place later sold for. He didn’t have a mortgage but after taxes and insurance I’d say he wasn’t putting anything in his pocket. He mowed the grass and constantly was fixing things. He had kept his dad’s place for 25 years without income just to make a capital gain. He’d had a string of deadbeats before me and when I left to live on the boat he was remorse. He could do math just fine, but he believed in prices always going up. So he sacrificed half his life tending that property. His wife took it in the divorce.
Renting was the smartest lifetime financial decision for anyone considering a purchase anytime in the past 10 or 12 years (depending on area), which the possible exception of 2011.
Sounds like you’re just sour grapes because the recovery has passed you by.
They were out bid by all cash buyers:}
Renting is cheaper than owning in the high salary and upscale areas. Always.
“Crumbling short term housing demand across what are normally high volume selling months combined with long term demand at 17 year lows tells us that housing prices have a very long way to fall.”
No question. The only thing holding housing prices at these grossly inflated levels is fraud.
Is it clear sailing from here on out for the U.S. stock market?
Shorts pile on as S&P flirts with its 48th record in the past year
February 28, 2014, 6:58 AM
By Shawn Langlois
Next stop, 48. Like we used to say every day back in 1999, this is almost getting too easy. While it may feel good, it doesn’t feel right.
The S&P just nailed down its 47th record of the past year, and who in their right mind would bet against another new high at this point? You might be surprised, though you shouldn’t be (see chart of the day). Short interest is surging at the prospects of a tired bull, even as the market seems fairly content to lay waste to new highs.
But that recent strength is a bit misleading. Only 6% of all S&P 500 stocks closed at or near their 52-week highs, showing that this breakout has been “relatively half-hearted,” according to Chris Weston of IG Markets.
He added that 78% of the S&P components are trading above their 200-day moving average, which isn’t nearly as many as when the year started. Don’t let that stop you.
“When there is no real clear catalyst for the market and confusion sets in, it’s a good idea to do what has worked over the medium-term and buy U.S. stocks and European debt,” Weston wrote.
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“While it may feel good, it doesn’t feel right.”
Coincidentally, that’s the exact reason I have never slept with a hooker.
Feb. 27, 2014, 10:34 a.m. EST
The market’s in for a wild, but clearly bullish ride
By Mary Anne & Pamela Aden
The U.S. stock market is on the rise again. It was quick to shrug off the worrisome news, and the bull market remains solidly intact.
Fast whip, but not so bad
Even though the recent downward correction scared many investors, it really wasn’t that bad. In the end, the Nasdaq, which has been the strongest index, only declined 5.9%. And as you can see on Chart 1 , that’s really insignificant considering the rise it’s had since late 2012.
On the other hand, the Dow Industrials was the weakest index. But even in this case, the Dow’s downward correction was 7.2%, which was not that steep following last year’s strong rise.
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Thank god the economy is finally fixed.
Did the emerging markets crisis end as quickly as it began?
Europe
Armed Men Take Position at Two Airports in Crimea
By ANDREW HIGGINS and PATRICK REEVELL
FEB. 28, 2014
An unidentified armed man patrolled in front of the airport in Simferopol, Ukraine, on Friday. Credit Ivan Sekretarev/Associated Press
SIMFEROPOL, Ukraine — Amid fears of a Kremlin-backed separatist rebellion here against Ukraine’s fledgling government, armed men in military uniforms took up positions at two Crimean airports as Ukraine’s interior minister warned of “a direct provocation,” but there was no sign of any violence.
In Simferopol, the regional capital of Crimea, a large number of masked armed men were stationed at the international airport Friday morning. They were dressed in camouflage and carrying assault rifles, but their military uniforms bore no insignia. It was not clear who they were and they declined to answer questions.
In Kiev, the speaker of Parliament, Oleksandr V. Turchynov, who is now the acting president of Ukraine, convened a meeting of the National Security and Defense Council to discuss the situation in Crimea.
Announcing the meeting in Parliament, Mr. Turchynov said, “Terrorists with automatic weapons, judged by our special services to be professional soldiers, tried to take control of the airport in Crimea.”
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The Opinion Pages|Editorial
Thailand at the Brink
By THE EDITORIAL BOARD
FEB. 27, 2014
Political tensions that have long simmered in Thailand have exploded into violence in recent days. Clashes and gunfights between antigovernment protesters and security forces led to several deaths and many more injuries over the weekend. But the country’s elected leaders and the protesters are digging in their heels even as the conflict tears their country apart. The leader of Thailand’s army recently warned that continued violence could lead to a “collapse” of the country.
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Latin America News
Devaluation Hurts Argentina’s Regional Standing
Colombia Has Likely Overtaken Argentina as Latin America’s Third-Largest Economy
By Darcy Crowe and Taos Turner
Feb. 27, 2014 7:51 p.m. ET
People marching against high rates of inflation in Buenos Aires. Reuters
Following Argentina’s humbling currency devaluation, the country is suffering another economic embarrassment: Colombia has likely overtaken it as Latin America’s third-largest economy.
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China hard landing fears return
Posted by Houses and Holes in China Economy
at 3:41am on February 27, 2014
Max Walsh at the AFR is worried about a Chinese hard landing and he’s not alone:
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Were you surprised or amused when Mt. Gox (aka Magic: The Gathering Online eXchange) blew up?
Feb. 28, 2014, 5:44 a.m. EST
Mt. Gox files for bankruptcy protection: WSJ
By Barbara Kollmeyer
MADRID (MarketWatch) — Troubled bitcoin exchange Mt. Gox has filed for bankruptcy protection, with outstanding debt of $63.6 million, The Wall Street Journal reported on Friday. The announcement was made by a lawyer for the company at the Tokyo District Court. Late Tuesday, the WSJ reported that federal prosecutors based in New York had served Mt. Gox with a subpoena earlier this month. The website was wiped clean of information earlier this week, sending panic through investors who have been trying to get their bitcoins off the troubled exchange. The last statement came from Mt. Gox on Tuesday when it said all transactions were being closed for the time being to “protect the site and our users.” Mt. Gox said 750,000 of its customers’ bitcoins and 100,000 of its own had been lost, representing a loss of $473 million.
I Drink Your Milkshake! - There Will Be Blood
In all seriousness, aside from being free of central bank management, plus thinly-traded and not bailout-worthy, I’m missing the supposed “great technological leap forward” bitcoin offers over electronic payment transactions in fiat currency FOREX transactions. What is it?
Feb. 27, 2014, 2:12 p.m. EST
Bitcoin still legal but feeling tender
Opinion: Cryptocurrency lacks trust and confidence of users
By David Weidner, MarketWatch
This is no way to run a currency.
The bitcoin panic this week sparked by the disappearance of Tokyo-based exchange Mt. Gox rattled the so-called cryptocurrency markets. At one point Monday, bitcoin value fell more than 20% in just a few hours. It has since stabilized, if you can call it that, to around $550. Bitcoin is trading at $578.80 as of this writing —oops, make that $584.40…
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In all seriousness, bitcoin truly is a sophisticated advance in currencies. Its ability to speed transactions globally, its lack of costs and fees, its potential for acceptance in any economy makes it potentially the biggest leap in the money system since we dumped seashells for metal and paper.
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Buy the dip!
The Daily Show with Jon Stewart
Thursday February 27, 2014
Intro - A Fox and a Drox in a Box
Millions of the world’s youngest money, Bitcoin, mysteriously disappear from Bitcoin currency exchange Mt. Gox. (03:40)
How about un-surprised AND amused.
Is Bitcoin just digital tulip bulbs?
Bitcoin is a late-night comedian’s wet dream. Check out what Jon Stewart did with it (link above).
Feb. 28, 2014, 9:01 a.m. EST
Bitcoin prices fall 4.5% on Mt. Gox bankruptcy
By Saumya Vaishampayan
NEW YORK (MarketWatch) — Bitcoin prices fell across exchanges Friday after the bitcoin exchange Mt. Gox filed for bankruptcy in Japan and said it had lost 750,000 of its customers’ bitcoins. CoinDesk’s bitcoin price index, which includes prices from Bitstamp and BTC-e, fell 4.5% to $550.97 from a close of $576.70 late Thursday. That’s the lowest level since Tuesday.
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What’s a 4.5% price swing in the life of a currency whose value shot up from $4 to north of $1000 in a year’s time?
Feb. 28, 2014, 10:51 a.m. EST
Fortress bought $20 million in bitcoin in 2013
NEW YORK (MarketWatch) — Fortress Investment Group FIG +1.17% disclosed Thursday it purchased $20 million worth of bitcoin in 2013 in a filing with the SEC. Fortress didn’t disclose at what price it purchased the bitcoins, but said it had an unrealized loss of $3.7 million on its bitcoin holdings as of Dec. 31. The company was previously reported to be forming a bitcoin fund.
Mt. Gox falls, but China is seeing a bitcoin ‘gold rush’
February 28, 2014, 8:09 AM
Now that the bitcoin giant Mt. Gox has fallen, is the craze for the digital currency fading?
Well, at least not in China.
The panic triggered by the sudden collapse of Mt. Gox this week seems to have less effect on the zeal of Chinese investors.
On Friday, while fans in Hong Kong embraced the opening of the first bitcoin retail store by ANXBTC exchange in the city, Beijing-based Huobi.com, China’s largest bitcoin exchange, saw its daily trading volume surge to 69% of the world’s total trading volume. This made Huobi the largest trading platform in the world by volume, according to latest statistics of Bitcoinity, a bitcoin rate tracking service site.
Despite bitcoins’ slow adoption rate and recent troubling questions surrounding its future, ANXBTC CEO Ken Lo told MarketWatch in Hong Kong that he saw a huge demand for the currency in Chinese markets and a bright future ahead, as more people come to learn about it and find it more convenient to buy the virtual currency.
Speaking at the opening ceremony of the bitcoin retail store, Lo said buyers can simply walk into the store, pay the cash, and send the bitcoins to their digital wallets, except that they would have to provide an ID card and proof of address to comply with Hong Kong’s regulations on anti-money laundering.
According to Bitcoinity’s data, ANXBTC’s trading volume is around 1,000 BTC in the last 24 hours.
Hong Kong, a special administrative region of China, has not yet followed the mainland regulators’ lead and tightened any curb on bitcoin transactions. Local government only issued a warning earlier this year that they are closely monitoring the development of bitcoins to make sure it will not shock the stability of local financial market.
China’s central bank in December ordered financial institutions not to provide bitcoin-related services and products, but the tightening measures seem to have proved unsuccessful in curbing investors’ interest for long.
At a time when the bitcoin’s value plummeted amid the collapse of Mt. Gox exchange, bitcoin lovers in China are seeing a “gold rush.”
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Bitcoin Wild West: Gamblers, investors and merchants
February 21, 2014, 1:02 PM
Commentary
By Cody Willard
We need to be careful in distinguishing momentum-junkie gamblers who are speculating in bitcoin, from investors and savers who have used it to store a small amount of capital, from merchants who are willing to accept bitcoins as payments.
Bitcoin speculators/gamblers are similar to the folks who have been trying to ride the current #PotPennyStock frenzy to wealth or any other type of currency speculator who is blindly gambling on short-term price movements, often using borrowed money.
Then there are those folks like me, as I fit into two of the above categories. I’m an investor/saver who has put a tiny bit of my savings into bitcoin back when it was trading in the double digits, not hundreds or thousands of dollars. As I noted at the time, putting one-half of one percent into some bitcoin helps diversify and hedge away from the drunken Federal Reserve/Republican/Democrat Regime dollar-printing schemes and the impact of the ongoing currency wars that I continue to write about.
“But, how can you possibly consider bitcoin a store of value when it has such wild price swings?” I’ve seen this question from bitcoin skeptics on Scutify, Marketwatch, Twitter, and everywhere else I’ve ever mentioned bitcoin. My best answer, put simply, is that there is value in knowing I can use bitcoin to exchange dollars quickly around the world.
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Excerpt from the URL link to this story: “are-bitcoins-just-two-bit-tulips”
Feb. 28, 2014, 1:15 p.m. EST
How history explains bitcoin, Mt. Gox bankruptcy
Dutch tulipomania and the future of cryptocurrencies
By Chuck Jaffe, MarketWatch
Bitcoin and other virtual currencies are worth the same now that they were a week ago, before bad news headlines, hints at possible government or regulatory intervention and more dramatically changed market conditions.
Oh, in practice that’s not right. The prices for all cryptocurrencies went tumbling this week with the evaporation of Mt. Gox; the largest bitcoin exchange vanished amid swirling troubles, acknowledging bitcoin losses of roughly $475 million, then resurfaced to declare bankruptcy in a Tokyo court.
But in reality, the intrinsic value for these virtual monies was unchanged; they were—and are—worth whatever someone will pay for them or give in return for them at any given moment.
And for as much as supporters suggest that bitcoin and other currencies represent the future of money and a massive change to the global payment and transaction system, people should be looking toward the past as they consider how the story of bitcoin, dogecoin, litecoin, namecoin, mastercoin and any other fabulous new moolah could play out.
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I saw this and was blown away:
‘Speaking to media at the end of the G20 finance ministers and central bank governors meeting in Sydney, the European Central Bank’s president Mario Draghi acknowledged that asset price bubbles are being generated in some countries, especially emerging markets, due to the record low interest rates in many advanced economies.’
“These are localised bubbles and they should be coped with, they should not be ignored at all, but they should be coped with what we call macroprudential instruments,” he responded to a question from the ABC on whether central banks should act on asset price inflation, not just consumer prices.’
‘Mr Draghi says preventing asset price bubbles is a key element of maintaining general price stability, which is the main objective of most central banks.’
OK, then this:
‘Asked whether New Zealand, which has required its banks to cut back substantially on low-deposit home lending, is setting a good example of effective macroprudential policy, Mr Draghi replied: “It might well be if I knew it.”
‘When the New Zealand policy was explained to him in brief as putting a cap on the number of low deposit loans that can be issued by banks, Mr Draghi gave a general tick of approval.’
Pretty much every reader here that is paying attention knows about the New Zealand housing bubble policies. And the central bank chief for the EU doesn’t?
The ‘Property Brothers’ Are Reality Television’s Crack Cocaine
It’s the crack cocaine of reality television. HGTV’s ‘Property Brothers’ are handsome twins from Canada who fix up dilapidated houses into real estate gems. By Itay Hod.”
Did these flippers shows ever go away during the bust ? They seem to be back in full force now.
Speaking of flippers, my landlord is a stuck one. I can tell he never intended to rent the property where I’m living. My refrigerator starting to make a clicking noise, so I called him about it. He replied that the refrigerator is not included with the one-bedroom cottage that I rent from him. I explained to him that if he isn’t providing a refrigerator, then I won’t be providing a rent check. I will stay out my last month and live off of Taco Bell and Subway, and then fill my Prius up with all my stuff and go somewhere else.
I got caught up with three stuck flippers in my dad’s extended family last week as we gathered to lay his older brother to rest. All of them have homes on the market this year. After a few weeks on the market, none of these homes have been “snapped up” in a bid war. Lil’ Sis’s situation is the most desperate of the three, with a bonafide “Breaking Bad” tenant who is also a Section 8 fraudster.
Look forward to posting later this spring on how these three sales attempts in separate markets (PNW, SoCal & Midwest) pan out!
So I get this cold call from a recruiter with a job that sounds great. She gives me the pay range, and sets me up with an interview at the agency. When I come in, I meet with her boss because she’s out of town. The boss wants me to take $10k less than the original number. I am the only candidate who is qualified on paper for this job. I politely ask to start the negotiation process at the originally stated range.
Do you guys want to place bets on whether or not they send me for an interview with the client? We can use this as a litmus test as to whether or not we have an economic recovery.
If it was me I would hold my ground for the $10k. You don’t need them. You are a renter.
Does anyone have any “on-the-ground” stories about the possible changes to flood insurance?
I have a friend here in the office who rents here (with her family) but they also own a house (that they rent out) in MA (very near RI). Current flood insurance on the house is absurd at $11,000 a year (this is just the flood insurance, not homeowners insurance). A house nearby (slightly larger, but not by much) is part of an estate and when the family asked for a flood insurance quote if the new/unsubsidized rates go into effect (so they can try to sell it), they were told it would be $97,000. For a policy that can’t pay out more than $250K. You could self-insure by banking the premiums from 2 1/2 years. Oh, and the houses in the area haven’t flooded since the 50’s when there were 2 inches of water in the first floor of my friend’s house. No flooding during Sandy.
Polly, Friends in Oregon were looking at a short sale last month. It’s right on the river and listed for less than half of its ‘07 price. Realtor told them the flood insurance would be 1000 per month . This was before the Biggert Waters delays, but they took a pass anyway. The home was built in ‘97 just after the ‘96 floods, and by looking at old aerial photos it looks like the lot may have flooded back then.
Personally I stay away from river front and canyons.
Did you advise them to stay out of housing or they’ll sustain massive losses?
Yes, but it’s like talking to a depreciating wall.
Did you explain depreciation to them? How did they respond?
Who is the highest paid retired NFL player? The answer will likely surprise you
In Forbes’ list of highest paid retired athletes, no former NFL player cracked the top 10. Michael Jordan, to the surprise of nobody, was first at $90 million last year.
But who was the top earner among former NFL player according to Forbes? You might guess Jerry Rice, who has stayed in the spotlight after his career. Maybe Steve Young, because Joe Montana really didn’t seem interested in publicity after retirement. Michael Strahan seems to be on our televisions all the time. John Elway had a chain of car dealerships in Denver and a pretty nice job with the Broncos, so maybe him?
Nope, none of them was the top earner among retired football players last year. Any guesses?
Well here it is:
Bet not many of you guessed Roger Staubach.
Staubach was a Heisman Trophy winner at Navy, the Super Bowl VI MVP for the Cowboys at quarterback, also won Super Bowl XII with the Cowboys and threw for 22,700 yards and 153 touchdowns in his nine NFL seasons. He was elected to the Pro Football Hall of Fame in 1985. And he was just as successful after he was done playing.
Staubach was 12th on the list at $12 million for 2013. He does some stuff for USAA promoting military awareness but isn’t a well known pitchman or anything. So what gives? Staubach hit the jackpot in real estate.
According to Forbes, Staubach started a real estate company in 1977 as his Cowboys career was coming to an end. He owned 12 percent of the company when he sold it to Jones Lang Lasalle in 2008. The multi-year payout totaled $640 million. The 72-year-old put half of his share into a trust for his children, Forbes said, and the last payout from the sale was last year.
For all the current NFL players, Staubach provides quite the lesson: Invest wisely now, it might pay off big later on in life.
http://sports.yahoo.com/blogs/nfl-shutdown-corner/highest-paid-retired-nfl-player-answer-likely-surprise-203235589–nfl.html
Another fortune made in real estate? I am shocked, I tell you shocked. I thought real estate always depreciated. Always.
Houses do depreciate J_Fraud….. like all man made items.