The Housing Bubble

Buying a house today will be the worst decision of your life.

Don’t do it!

“Houses result in staggering losses even under the best of conditions.”

Here’s a thousand words:

http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=M2V

Read ‘em and weep.

“The solution to the cratering housing market isn’t more grossly inflated prices for it was grossly inflated prices that resulted in a cratering housing market.”

Precisely

All-Cash Purchases Are A Huge Part Of The US Housing Market

Creditworthy homebuyers continue to be squeezed out of the housing market by those making all-cash purchases.

Cash purchases accounted for 39% of total sales in Q1 2014, according to Morgan Stanley’s Vishwanath Tirupattur. While this is up from the second half of last year, it is down from the highs of Q1 2013, Q1 2012, and Q1 2011.

In terms of absolute volume, cash transactions have fallen down 15% quarter-over-quarter and are at the lowest level since Q1 2009.

This is because “distressed transactions, which have a far higher share of cash sales than their non-distressed peers do, are down 58% from their peak in Q3 2009 and hit their lowest levels in Q1 2014 since Q4 2007,” writes Tirupattur.

Surprisingly though, it turns out that even as distressed transactions have fallen, the share of cash purchases in distressed transactions is at all-time high. “Investors of distressed properties are not buying as many properties, but they appear to be using cash more often than ever,” writes Tirupattur.

So what exactly is going on?

“In our view, the rise in cash share seems to be less a function of borrowers using cash in lieu of mortgage financing, and more a consequence of tight mortgage lending conditions suppressing overall transaction volumes,” argues Tirupattur.

While it’s getting easier for Americans to get mortgages, mortgage credit availability is still tight historically.

And as mortgage lending continues to remain “anemic,” and as shadow inventory declines leading to fewer distressed sales, national housing activity will continue to soften unless mortgage lending picks up.

http://finance.yahoo.com/news/cash-purchases-huge-part-us-172112697.html

The most sought-after homes still underwater

Buyers looking for affordable homes aren’t finding much in today’s housing market. While investors snatched up most foreclosures, another after effect of the crash is keeping supply short: negative equity. Nearly 10 million borrowers still owe more on mortgages than their homes are currently worth, according to Zillow. That has kept them stuck in place.

As home prices rise, the nation’s negative equity or “underwater” rate is falling overall, but affordable homes are still drowning disproportionately. They are three times more likely to be underwater than expensive homes, according to Zillow. Thirty percent of mortgaged homes in the bottom price tier ($98,400 and below) are in negative equity, compared with 18 percent in middle tier ($90,400 to $306,700) and 10.7 percent in top tier ($306,700-plus).

“The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,” said Zillow Chief Economist Stan Humphries. “It’s hard to overstate just how much of a drag on the housing market negative equity really is, especially at the lower end of the market, which represents those homes typically most affordable for first-time buyers. Negative equity constrains inventory, which helps drive home values higher, which in turn makes those homes that are available that much less affordable.”

Thousands of borrowers have resorted to short sales over the past several years, negotiating with banks to let them sell their homes for less than the value of the mortgage; that option is no longer attractive because Congress allowed the Mortgage Forgiveness Debt Relief Act, passed in 2007, to expire. Short sellers are now liable for taxes on the forgiven debt.
While negative equity continues to fall, it fell at its slowest pace in the first quarter of this year, as home value growth slowed. On top of that, “effective” negative equity, when a borrower has less than 20 percent equity in the home, is far higher, now at nearly 37 percent of all homeowners with a mortgage. Most homeowners need that much in order to meet the costs of selling their current home and putting a down payment on another home.

That may be why sellers are overpricing their homes today, because they have to. Forty percent of sellers recently surveyed by Redfin said they are planning to price their homes above market value when they list in the second quarter of this year; that’s up from 33 percent at the beginning of this year. While confidence is a big part of that, necessity is another.

High price expectations may actually be keeping inventories low, as the market is “bedeviled by an apparent gap between the price expectations of potential buyers and sellers,” noted economist Mark Zandi in a May report. “Despite recent gains, many sellers do not think prices reflect their properties’ value. Recalling the pre-crisis peak, they are not even listing their homes. The inventory of houses for sale has risen recently but remains low.”

For the housing recovery to get moving again, first-time home buyers need to step in where investors are stepping out. In order for them to get in, they need to find affordable homes, and that is where supply is sorely lacking. Home builders are focusing on larger, higher-priced homes, because that is currently where the buyers are.

While the nation’s largest home builder, DR Horton, recently announced a new entry-level product, it is not enough to juice the market nationally. Demand needs to improve on the low end, and supply needs to meet it. Prices are only rising because supply is so low, not because demand is surging. In a healthy market, prices rise as a result of rising demand, not the other way around.

http://www.cnbc.com/id/101685441?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101685441%7CThe%20most%20sought-after%20hom

Roommates are a financial lifeline for some seniors

Living with roommates when you’re 25 is one thing. When you’re 65, it’s another story—but it’s a reality for a growing number of older Americans.

Middle-class seniors and the growing wave of baby boomers behind them want to stay in their homes and communities as they grow old, but escalating costs of everything from food to medication to property taxes; battered retirement portfolios; and dwindling savings have today’s older Americans looking to become ad hoc landlords or tenants, even if the practice sometimes is forbidden by zoning restrictions.

“With high costs of living today, and diminished resources of seniors, renting and sharing excess space in one’s dwelling will certainly call into question the relevance of current laws,” said Robert Stein, president and CEO of the American Society on Aging, via email. Ultimately, while these kinds of arrangements can give seniors a richer life as well as financial stability, Stein said there were plenty of instances where people attempting these kinds of living situations had run afoul of authorities.

“That’s a big issue,” said Rodney Harrell, housing expert at the AARP. “There are certainly going to be people who do what it takes to survive.”

Jackie Herships is one of them.

“I guess I’m a bit of a risk taker,” said the New Jersey resident who is willing to break the law to hang onto her five-bedroom house in an affluent suburb. As her neighborhood has gentrified, property taxes have risen and zoning laws have gotten stricter, turning the 72-year-old “semi-retired” writer and public relations professional into an underground landlord.

“The laws have gotten, from my point of view, more onerous and more yuppie oriented over the years,” she said. Since her neighbors know about her tenants, Herships said, she worries about being found out. “I’m very active in the community, which is a good thing, but it makes me very visible…. They could, someday, definitely turn me in,” she said.

Without her tenants, a group that has ranged over the years from a visiting Chinese academic to a retired publisher who Herships considers more like family, she couldn’t afford to keep her house. “I’ve heard of people losing their homes,” she said, after their clandestine rental agreements came to the attention of local authorities.

If this happened to her, Herships worries it would leave other seniors who have lived with her—a former playwright who was tall enough to help with chores like changing light bulbs and drove Herships home after she had cataracts surgery, and a Buddhist nun who helped Herships navigate her house after breaking her foot—with no place else to go.

She worried for herself, as well. “Let’s say I was living here all by myself,” she said of the aftermath of her injury. “Who’s going to help me get to the bathroom or whatever I need?”

Like many of today’s seniors, Herships is still bearing the financial burden of a mortgage, and her renters contribute significantly to her income stream.

“Older consumers are carrying more mortgage debt into their retirement years than in previous decades,” the Consumer Financial Protection Bureau said in a recent report. The percentage of homeowners age 65 and older with a mortgage rose by 8 percentage points in a decade. As of 2011, fully 30 percent still carried mortgage debt, as did more than 21 percent of homeowners 75 and older.

“During the last decade we went through this shift,” Harrell said. “Before that, most of the homeowners 50-plus owned their homes free and clear.”

The percentage of older Americans who live with non-romantic housemates has stayed about the same, hovering around roughly 1 percent of the population 50 years old or older, Harrell said. Today, though, the absolute number of people living in these circumstances is greater because the number of older Americans has increased as baby boomers have aged.

Staci Gallardo, a landlord in Northern California, rents rooms in an investment property across the street from her own home to senior citizens who can’t afford to go anywhere else.

“Most are on disability [or] they have health issues,” she said. “They need a place to go. They have a fixed income and apartments are kind of pricey,” she said.

Most are entirely dependent on Social Security or disability for income, although Gallardo said one of her tenants helped her out with yard work to earn a little extra money. If her tenants had to pay rent on their own, “I don’t see how they could have an income of between $900 and $1,100 a month … and have money to eat and pay utilities.”

“Absent adequate savings, many are compelled to return to work [or] are renting out rooms … to make do,” said Robert B. Goldberg, senior director of legislative affairs for the Jewish Federations of North America, which has been involved in promoting programs and policies to help seniors stay in their homes.

Rita Miller, 84, shares her rented apartment in New Jersey out of financial necessity. “I do have Social Security and some money from the sale of my house, which I am living on and is going too fast,” she said in a conversation that took place over email, since Miller is deaf.

This subletting arrangement covers about one-third of her rent, Miller said. “If I did not have the tenant I would not have enough money to stay here,” she said. “I really have no objection to assisted living if I came to need it, but a lot of the places I have investigated are out of my financial range so I do not know what [I] would do.”

Aside from the extra measure of financial stability her tenant gives her, Miller said she’s grateful for the sense of security, as well. “I am really quite independent so I do not depend on my tenant, but it is just nice for me to know someone is here,” she said. “So far I have not had any emergencies that required her to help me, but it gives me peace of mind to know someone is here.”

In addition to financial reasons, this peace of mind is another key benefit for seniors worried about living alone.

“It does allow her to stay in her home instead of going into a facility,” said Gavin Grooms, a 50-year-old Provo, Utah, resident who advertised on Craigslist looking for someone to share his 85-year-old mother’s house. Although Grooms lives nearby, “A big part, for me, is making sure if there was an emergency, that she’s got someone who’s right there who could get ahold of me quickly,” he said.

Grooms’ mother has COPD, no longer drives and relies on oxygen, but Grooms said she still enjoys hobbies like gardening and values her independence. “She doesn’t want to feel like she’s being nursed at this point in her life. She’s not ready for that.”

http://www.cnbc.com/id/101685593

Encino, CA Housing Prices Crater 31% YoY; Inventory Skyrockets 70%

http://www.movoto.com/encino-ca/market-trends/

heading down to total wine so I can celebrate the equity gains this year.

buying a house is your ticket out of serfdom to the man.

Moorpark, CA Housing Prices Crumble 30% YoY; Inventory Balloons 40%

http://www.movoto.com/moorpark-ca/market-trends/

Glendale, CA Housing Prices Dive 9% YoY On Billowing Housing Inventory

http://www.movoto.com/glendale-ca/market-trends/

Yesterday there was some discussion about Ben not having time to check his email and therefore missing requests for interviews. Maybe those reporters should post the request for an interview on the blog, where it’s more likely to be seen? Even something so simple as “yo, wanna talk? check yo gmail.”

Yorba Linda, CA Housing Inventory Balloons 81% As Prices Sink 6% YoY

http://www.movoto.com/yorba-linda-ca/market-trends/

“Philly Realtor Charged With Stealing From Clients”

http://www.panewz.com/content/philly-realtor-charged-stealing-clients

‘High risk’ label from feds puts gun sellers in banks’ crosshairs, hurts business

By Kelly Ridell
Sunday, May 18, 2014

Gun retailers say the Obama administration is trying to put them out of business with regulations and investigations that bypass Congress and choke off their lines of credit, freeze their assets and prohibit online sales.

Since 2011, regulators have increased scrutiny on banks’ customers. The Federal Deposit Insurance Corp. in 2011 urged banks to better manage the risks of their merchant customers who employ payment processors, such as PayPal, for credit card transactions. The FDIC listed gun retailers as “high risk” along with porn stores and drug paraphernalia shops.

PHOTOS: Best concealed carry handguns

Meanwhile, the Justice Department has launched Operation Choke Point, a credit card fraud probe focusing on banks and payment processors. The threat of enforcement has prompted some banks to cut ties with online gun retailers, even if those companies have valid licenses and good credit histories.

“This administration has very clearly told the banking industry which customers they feel represent ‘reputational risk’ to do business with,” said Peter Weinstock, a lawyer at Hunton & Williams LLP. “So financial institutions are reacting to this extraordinary enforcement arsenal by being ultra-conservative in who they do business with: Any companies that engage in any margin of risk as defined by this administration are being dropped.”

p.washingtontimes.com/…/may/18/targeted-gun-sellers-say-high-risk-label-from-feds/ - 89k

“Walnut Creek, CA Realtor Indicted, Defrauding Investors”

http://news24-680.com/walnut-creek-bis24-980/real-estate/walnut-creek-realtor-indicted-defrauding-investors

“The most toothless criminal plea imaginable”.

Way to go, Comrade Holder.

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http://m.huffpost.com/us/entry/5351885

(excerpt)

The U.S. government has finally backed up its boast that no bank is too big to jail, if by “jail” you mean “vigorously slap on the wrist.”

The Justice Department on Monday filed criminal charges accusing Swiss banking giant Credit Suisse of conspiring to help U.S. customers dodge taxes. The bank pleaded guilty to the charges, breaking from a recent tradition of letting banks defer prosecution. Credit Suisse also agreed to pay about $2.6 billion to settle the claims brought by the Justice Department, the Federal Reserve and New York State.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” Attorney General Eric Holder said in a press release announcing the settlement.

Though the government is undoubtedly proud of itself for successfully managing to prosecute a large bank — with the first guilty plea for a big financial firm since 1989, The New York Times notes — this by all accounts is turning out to be the most toothless criminal plea imaginable. It’s hard to imagine it will deter future crimes.

Prosecutors and regulators have done everything they could to make this criminal case easy on Credit Suisse. The bank will not lose its ability to do business in the United States, The Wall Street Journal has reported. Its top executives, including CEO Brady Dougan and Chairman Urs Rohner, will keep their jobs.

Meanwhile, there is no indication that any more people will be criminally charged in the case beyond the small handful of lower-level bankers who have already been indicted. Dougan has claimed that bank management was unaware of what these underlings were doing and did not encourage tax evasion. The U.S. government could always bring more charges. For now, though, it has apparently decided to punish the bank’s shareholders instead of its managers.

Reptile Gov slashes taxes but growth falls, revenues crater, and state bond rating is slashed. Brownback’s tax cuts have failed to deliver the economy growth he promised, and have led the state to consider cutting already lackluster services to the bone. He’s pretty fucked if he can’t come up with some way to fix it.

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“On Thursday, Moody’s announced it was downgrading the state’s bond rating. The reason was the state’s sluggish economic recovery compared with other states. One result of that sluggishness is plummeting state revenue that fell an astonishing $92.8 million below projections for April.

For months, the governor argued just the opposite. He said the big tax cuts put Kansas ahead of the pack.”

http://www.kansascity.com/2014/05/02/4998455/gov-sam-brownback-is-suffering.html

Guys and gals, good news: Reverse mortgages no longer a last resort. Money magazine says reverse mortgages are now “safer.” JFC.

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http://money.cnn.com/2014/05/16/pf/reverse-mortgage.moneymag/index.html?source=cnn_bin

Filed under: Boomers gonna boom.

Every Accidental Landlord that can get out without bringing cash to the table will. That’s a lot of new inventory on the market. Then they can fight over who is willing to drop their price enough to make it out alive.

Here are some $20,000 new houses. They seem to run about $35 to $50 a square foot. Theyŕe project houses, though, and pretty cabin-like, with no basements. Some are cool looking, some look like a mobile home with a big roof and gables.

Can These $20,000 Houses Save the American Dream?

http://www.slate.com/blogs/the_eye/2014/05/19/rural_studio_builds_brand_new_20_000_houses_in_alabama.html

¨Rural Studio launched its affordable housing program in 2005. We were eager to make our work more relevant to the needs of west Alabama, the Southeast, and possibly the entire country. We looked at the omnipresent American trailer park, where homes, counterintuitively, depreciate each year they are occupied. We wanted to create an attractive small house that would appreciate in value while accommodating residents who are unable to qualify for credit.

Our goal was to design a market-rate model house that could be built by a contractor for $20,000 ($12,000 for materials and $8,000 for labor and profit)—the 20K House, a house for everybody and everyone. We chose $20,000 because it would be the most expensive mortgage a person receiving today’s median Social Security check of $758 a month can realistically repay. A $108 monthly mortgage payment is doable if you consider other monthly expenditures. Our calculations are based on a single house owner, because 43 percent of below-poverty households in Hale County are made up of people living alone. That translates to a potential market of 800 people in our county.¨

The kids are not alright

Denver Post - All look, no leap: Millennials could pay for cautious financial decisions

“Millennials aren’t buying in. The youngest millennials, at least by some definitions, are graduating from high school this month, and most of those will go to college later this year. The way they approach finance, not to mention the financial realities they’re faced with, can be pretty foreign to older generations.

“They don’t invest as much,” says Mike Serio, the Denver-based regional chief investment officer at Wells Fargo. He says it comes down to two things: personal attitudes and, among those who’ve taken it on, student debt.

According to Pew Research Center surveys, millennials — defined here as ranging in age from 18 to 33 — have higher levels of student loan debt, poverty and unemployment, along with lower personal income, than the two preceding generations at the same point in their lives.

Millennials outpace their predecessors in student debt. “According to our study, 64 percent financed school through student loans as compared to 29 percent of boomers,” Serio says.

He reels off statistics on student debt, making loans sound like clouds following indebted millennials around from the Apple store to the bars and back home, dumping rain on hoodie-wearing young adults as they check BuzzFeed and Facebook.

“Seventy-five percent say those loans impacted their ability to buy a home; 27 percent said ‘delayed me from moving out of my parents’ home’; 29 percent delayed marriage; 43 percent delayed starting a family.”

What those kidz need are $500,000 starter homes!

Asked whether the government would accept any changes recommended by Carney, who the chancellor, George Osborne, has asked to monitor the scheme, Cameron told BBC Radio 4’s Today programme: “We will consider any changes that are proposed by Mark Carney. But as he said, this is a well-targeted scheme and it has helped tens of thousands of people to get on the housing ladder and have mortgages.”

Vince Cable, the business secretary, has said the second phase of the Help to Buy scheme is feeding demand in the housing market. Carney said it was a “pretty targeted programme” that was relatively small, but he added: “It could grow a lot and it could change attitudes in other parts of the mortgage market. That’s why we have to be vigilant.”

http://www.theguardian.com/money/2014/may/20/david-cameron-help-to-buy

UK house prices rose by 8% in the year to the end of March, official figures show, as the prime minister says he will consider changes to Help to Buy.

The annual increase slowed compared with a 9.2% year-on-year price rise to the end of February.

However, the latest data from the Office for National Statistics (ONS) showed that the annual property price increase in London stood at 17%.

http://www.bbc.co.uk/news/business-27484221

the average sales price on a home in London is now just under $1 MM. the average for all of england/wales is now $457,600 - skewed upward by London, but still quite high even in some objectively shitty areas.

since the average “property deposit”/down-payment over there for non-cash buyers is 25%, it means you need at least $250K or so just to get in the game.

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http://www.theguardian.com/money/2014/may/19/house-prices-london-rise-80000-rightmove

Asking house prices in London have risen by £80,000 since January

theguardian.com, Monday 19 May 2014 10.27 BST

The average asking price of a property in London has risen by £80,000 since the start of 2014, as sellers try to cash in on continuing demand from buyers, according to the property website Rightmove.

The listing site said asking prices in the capital hit an average of £592,763 in May, 3.3% up on April’s figure and 16.3% higher than in May 2013.

Across England and Wales new sellers are asking 8.9% more than a year ago, at an average of £272,003. The annual rate is creeping closer to the 10.4% seen in October 2007 while a month-on-month rise of 3.6%, or £9,409, was the highest ever seen in May.

The figures follow comments over the weekend by the Bank of England governor, Mark Carney, that the property market poses a risk to economic recovery.

He warned of “deep, deep structural problems” in the UK market, and said the main problem was that not enough new homes were being built.

Funny how the article never mentions:
Political Party (cough - democrat - cough)
Huge obama supporter
Huge obamacare supporter

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Miami-area mayor charged in alleged mortgage fraud scheme
Zachary Fagenson - May 19, 2014

May 19 (Reuters) - A Miami-area mayor has been charged as part of an alleged mortgage fraud scheme that bilked more than $8 million from lenders, officials said on Monday.

Marie Lucie Tondreau, the mayor of North Miami, faces up to 30 years in prison for six counts of wire fraud, federal officials said in an unsealed indictment.

She is the fourth Miami area mayor to be indicted in the last year, and the first woman.

Prosecutors allege the 54-year-old Tondreau, who last year was elected North Miami’s first female Haitian-American mayor, used her weekly radio show and illegal cash payments to recruit buyers to lie on mortgage applications to obtain loans that were never used to buying homes.

Tondreau also received payments for recruiting fake buyers, prosecutors allege.

What is this about “loosening covenants” in the Fannie and Freddie context that Ocelot was talking about yesterday ?

What article or source does it come from, and what does it mean ?

Detroit news op-ed piece:
Your home: Nice neighbors, but a lousy investment

My house is many things, but from outward appearances it’s mostly a cross between a book depository, a recycling center and a biology lab that can’t afford Petri dishes and decided to use leftover plastic ware from Chinese take-out.

One thing a house isn’t is an investment. But try telling that to the folks who answered a recent Gallup poll, where “real estate” ranked as the best investment, followed by gold, stocks, savings accounts and CDs. (For some reason, the list omitted Mason jars, lottery tickets and Serta Perfect Sleepers.)

After the bursting of the real estate bubble, you’d think that people would forget the old-fashioned notion that a home is your best investment. No, an investment is your best investment. And, as the saying goes, you should never invest in anything that eats or needs maintenance. Which makes a diverse portfolio of stocks perfect, since you never need to muck out its eaves troughs or cut its lawn, although, from time to time, it does need pruning.

I took a signal from Cactus and rebalanced my former company 401k (again). Bull markets don’t generally last this long. Made enough in those stock funds. Time to get more income on 2 year maturity mix yielding 2%.

I recently discovered I’m living next door to an abandoned house. That neighbor had been living there since 1993, and suddenly vanished in mid-March, leaving a basement light on & the security light on her garage, which still lights up the yard between us & most of my backyard.
Lady homeloaner is in her early 50’s, for the last 3 years has been treated for cancer & complications & apparently fell behind in her mortgage payments. She left before she could be foreclosed on — all this from the neighbor on the other side. She is technically still the owner according to the county tax authorities. She’s living a few miles from here now. Grass is getting long there. She had several house cats. Since they moved away, the local songbirds have been proliferating noisily.

How exactly is tying up your money in an illiquid asset the best way to build wealth? Pay double the rent for the first 30 years, then half the rent (carrying costs) for the next 30.

Housing Finance Reform Should Now Focus on Fixing and Preserving Fannie Mae and Freddie Mac
Posted: 05/19/2014 3:30 pm EDT
by John Taylor, President and CEO of National Community Reinvestment Coalition

There has been an ill-advised and misplaced push to get rid of Fannie Mae and Freddie Mac. Doing so would be a mistake. Fannie Mae and Freddie Mac have affordable housing goals, which help to make sure that the market serves underserved communities, and which have had a tremendous positive impact. [ed. note: I have a suspicion this is a red herring]

Homeownership is the single most effective way for working-class people to build wealth and enter the middle class. [ed. note: How exactly...?]

So, fixing and preserving Fannie Mae and Freddie Mac may be the best hope for the American middle class. [ed. note: More debt and labor immobility is good for the economy]

http://www.huffingtonpost.com/john-taylor/housing-finance-reform-sh_b_5339780.html

I have little doubt that any new housing finance system will just be the same wolf wrapped in a new sheep’s skin. The system is too lucrative to too many big donors, and by extension, politicians. But I’m sure politicians would like once again to receive a little something from the GSEs themselves.

Because no news is good news:

http://www.infowars.com/is-the-mainstream-media-dying/

Memorial Day, 1945

“Then Lucian Truscott, who had returned to Italy from France a few month’s earlier to succeed Mark Clark as the Fifth army commander, turned his back on the living and instead faced the dead……..In his carbolic voice, Truscott spoke to Jack Toffey, to Henry Waskow, and to the thousands of others who lay beneath the ranks of Latin crosses and Stars of David. As Mauldin later recalled:

“Ha apologized to the dead men for their presence here. He said everyone tells leaders that it is not their fault that men get killed in war, but that every leader knows in his heart that this is not altogether true.. He said he hoped anyone here through any mistake of his would forgive him, but he realized he was asking for a hell of a lot under the circumstances…….He promised that if in the future he ran into anybody, especially old men, who thought death in battle was glorious, he would straighten them out.”

From “The Day of Battle, The war in Sicily and Italy- Volume Two of The Liberation Trilogy”

Any of you old timers remember the old time Coca-Cola?

I’m near the border and had the chance to drink a Mexican Coke.

Ahhh nice.

I am a student of market cycles. I just figured out that the “best time” to buy a property is 6-7 years before it’s a “BIG mistake” to buy that property.

Buying Brazilian Property Today is a BIG Mistake, says Economist Samy Dana
March 13th, 2014

http://www.brazilinvestmentguide.com/blog/2014/03/buying-brazilian-property-today-is-a-big-mistake-says-economist-samy-dana/

Well respected Getúlio Vargas Foundation economist and market commentator Samy Dana this week blogged via UOL Notícias some of his latest insights into the current state of play of the Brazilian property market, broadly translated below:

“One of the most basic and well-known economic principles is based on taking advantage of periods when prices are low and subsequently selling when high – a strategy synonymous with the financial intelligence that is implanted within Brazilian culture, even taking into consideration that there is very little education in schools related to this subject.

But when we observe the rationality of some people in the current property market – such principles are seemingly brushed to the side. Those who are deciding to buy a property – when prices are peaking – are committing a big financial mistake.

In the anxiousness of acquiring a home, moving away from renting and even looking to make a “good investment”, some Brazilian consumers have become convinced that property prices will continue to significantly rise over time – which is plainly incorrect.

It may seem overly pessimistic, but history itself continually shows examples of bubbles and their subsequent effects – the most obvious recent example being US Crisis. But nonetheless, consumers are distancing themselves from the reality

Still different here.

http://www.huffingtonpost.ca/2014/05/20/toronto-house-prices-soar_n_5359659.html

FWIW

Home Depot Inc.’s HD shares rose 1.9%, a rare bright spot. The No. 1 home-improvement retailer’s first-quarter results also missed estimates, but it said it’s sticking with its full-year sales outlook and raised its profit outlook.

The company said while it was hurt by a slow start to spring selling season, it saw solid results in non-weather impacted regions in the South and West. Chief Executive Frank Blake on a call described it as a “bathtub” effect, and said he expects weak sales in the first quarter will be “counterbalanced” by strong seasonal sales in the second quarter. He also dismissed concerns that the housing recovery has run out of steam following some softening indicators in the housing market in the last several months.

“As we parse the data from our own business, that is not what we see,” Blake said. “The core categories in the store
remained strong, pro-forma sales continued to grow, our services business grew by high single digits in the quarter, and we had another quarter of big ticket growth.”

While Blake is not expecting the housing market recovery this year to be as dramatic as last year’s, he is expecting that “home price appreciation, affordability and an aging housing stock in need of investment will continue to drive growth.”

By Andria Cheng

“The 61 retailers that have reported for the quarter just ended have missed estimates by an average of 2.6%, well below the long-term average of a 3% beat, according to Retail Metrics President Ken Perkins. First-quarter average profit is estimated to be down 2.3%, versus the 7.7% quarterly average profit growth of the past 15 years, he said.

“{The) stark contrast (between April same-store sales and the quarterly numbers) suggests pent-up demand was not enough to overcome a terrible start to the quarter,” Perkins said.

At the same time, downward revisions to second-quarter or full-year guidance from Dick’s (Sporting Goods), TJX, and Staples point to trouble with the lower end consumer who does not have a large discretionary budget, he said.

” The crux of the problem for retailers is the majority of Americans are not making enough money to grow their expenditures on discretionary purchases and are either keeping them flat or cutting back,” said Perkins.

“We”? Are you French?

it’s practically summer and we are still not building much of anything.

Home Starts Jump as U.S. Builders Freed From Winter Slowdown May 16, 2014

http://www.bloomberg.com/news/2014-05-16/home-starts-jump-as-u-s-builders-freed-from-winter-slowdown-1-.html

The pace of U.S. home construction jumped in April to its highest level since November, led by a jump in starts on multifamily projects, showing builders returned to sites after freezing temperatures restrained work earlier this year.

Housing starts climbed 13.2 percent to a 1.07 million annualized rate following March’s 947,000 pace, the Commerce Department reported today in Washington. Starts exceeded all analysts’ forecasts, with the median estimate of 79 economists surveyed by Bloomberg calling for 980,000. Permits (NHSPATOT) for future projects increased, a sign activity might accelerate in coming months….

Federal ‘Biosurveillance’ Plan Seeking Direct Access to Americans’ Private Medical Records

May 20, 2014 - 9:58 AM
By Barbara Hollingsworth

(CNSNews.com) – The federal government is piecing together a sweeping national “biosurveillance” system that will give bureaucrats near real-time access to Americans’ private medical information in the name of national security, according to Twila Brase, a public health nurse and co-founder of the Citizens Council for Health Freedom.

But Brase warns that the NHSS proposal would allow the federal government to monitor an individual’s behavior before, during and after any government-defined health “incident” – which could be anything from a local outbreak of the flu to a terrorist anthrax attack.

“It’s very broad. It doesn’t seem to have any limits, except they say something about, you know, properly protecting the data. But from our perspective, if the government gets access to this kind of data, [and] is allowed to do research with the data…then our privacy has already been compromised. The government has already said that our data is their data for their purposes of national health security,” Brase told CNSNews.com.

“It’s very clear to us that really the government is moving toward real-time access, toward close collaboration of government and doctors for ready access to the electronic medical record and then to conduct research and analysis.”

According to the draft proposal, NHSS will create “health situational awareness” by “collecting, aggregating and processing data from both traditional and nontraditional sources (such as social media) and from various governmental and nongovernmental stakeholders….Decision-makers will have the capability to visualize and manipulate data from many sources to create an operational picture suited to the specific situation and the decisions before them.”

But Brase warns that the government’s biosurveillance plan is much more intrusive than the data collection currently being done by the Centers for Disease Control and Prevention (CDC).

“We’re of the mind that the Fourth Amendment actually means something, so you can’t access everybody’s patient’s medical record just because you say there is a security threat or just because you say it’s good for the American public,” she told CNSNews.com.

“The Obama administration in the [American] Recovery and Reinvestment Act [of 2009] forces every doctor to have interoperable electronic medical records by January 1, 2015 or face penalties from Medicare, financial reductions in their payments. So that’s one thing that’s happening,” she told CNSNews.com.

“A second thing that’s happening is that the federal government has been funding the creation of state health information exchanges (HIEs) with the purpose of creating a national health information network. And they’re interoperable, which means they’re accessible to government and others, because they have to follow certain protocols and data standards that the government sets. So that’s another thing that’s happening.

“And the third thing that’s happening is that the health plans often require, may require with their contracts with doctors, that they submit their bills electronically. So all this is forcing everybody’s medical records online,” she explained.

http://www.cnsnews.com/…/federal-biosurveillance-plan-seeking-direct-access-americans - 56k -

Fast forward to 01:30 to skip the intro

“Cash
Rules
Everything
Around
Me

C.R.E.A.M.
Get tha money
Dolla dolla bill y’all”

http://www.youtube.com/watch?v=2j1zuTOnk4E

Price Check !

I just got back from one of the 3 city “supermarkets” within a block and a half from my house. It smells just like Miami Beach on a fine day. Today is Tuesday which is “Meat on Sale Day”. After rough conversions:

Pork Chops: $2.25 a pound

Ground Roundish hamburger: $3.00 lb (Brazil has leanest meat I’ve ever seen. The cows here need to eat more corn)

355ml Can of Sugar Coke: $1.00

Liter of whole milk that can (unopened) stay out 12 weeks in jungle weather in this crazy square vacuum pack box, just like the small ones American little kids put that straw through the hole in a juice box: $1.60

Owning one’s home outright for almost 6 years in a very nice neighborhood of Rio the “intentional cesspool”: $Priceless$

Goon, ever get a ticket here?:

http://www.reddit.com/r/Denver/comments/261h9x/tiny_town_in_denver_area_dishes_out_loads_of/

Proposed topic for discussion starting early tomorrow if not sooner:

Is China’s Housing Bubble Beginning to Burst?

Is there a ticking time bomb at the Fed?

Any thoughts on why Mr Market is suddenly so glum? Is it “Sell in May and go away” time already?

So is the Fed fixin’ to buy still more mortgages, then?

Over 20 years old but just as fresh as if it was recorded yesterday

My Bloody Valentine - Loveless:

https://www.youtube.com/watch?v=zhxXn60Z0yk

http://en.wikipedia.org/wiki/Loveless_%28album%29