May 20, 2014

Bits Bucket for May 20, 2014

Post off-topic ideas, links, and Craigslist finds here.

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Comment by goon squad
2014-05-20 01:42:47

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

Don’t do it!

Comment by Hard Rain
2014-05-20 03:24:25

Au contraire. It’s a sure path to riches.

Cambridge leads the way in regional housing boom
Real estate frenzy may be harbinger of things to come

Eastern Massachusetts appears headed toward another housing boom that could turn out bigger than the last one as frenzied real estate activity near Boston begins to spread to outer suburbs and beyond, economists and housing specialists say.

The projection is based on trends in communities that historically have led the region’s housing market, particularly Cambridge. The red hot market there has already pushed the median price 30 percent above the pre-recession peak and housing specialists say it’s only a matter of time before other cities and towns follow

Jan Kuypers and his wife, Eva, bought a two-bedroom condo in Cambridgeport four years ago for $410,000, and were content to just get their investment back when they decided to sell. But their real estate agent, Nellie Aikenhead of Avenue 3 Real Estate, advised they ask for $525,000.

Within a week of the condo going on the market this month, Kuypers took the highest of four bids at just over $575,000.

“It’s beyond anything we ever imagined,” said Kuypers, who is moving with his wife to California. “It’s just incredible.”

Comment by scdave
2014-05-20 07:05:07

who is moving with his wife to California ??

What ?? Moving to that state some here consider a hell hole ??

Comment by MrsLolaSoros
2014-05-20 07:28:28

Great, a story about someone who got lucky with accidental echo bubble timing. There’s plenty, and plenty who lost as much or more, including whoever bought that house from them.

Comment by Housing Analyst
2014-05-20 07:49:43

Looking forward, you have the massive losses built-in as a result of these boomerang sales.

Remember….. Todays sale at a grossly inflated price is tomorrows default and foreclosure.

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Comment by Rental Watch
2014-05-20 09:41:10

It’s similar to the stock market, where your personal performance is largely dependent upon when you entered the market.

That said, housing should go up with inflation…the stock market should generally beat inflation.

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Comment by Housing Analyst
2014-05-20 11:02:08

Houses depreciate resulting in net loss.

Comment by jbunniii
2014-05-20 12:56:35

Great, a story about someone who got lucky with accidental echo bubble timing.

Not sure I would call him lucky. His $575k is unlikely to buy him much in California.

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Comment by pazuzu
2014-05-20 16:01:02

Whatcha talking ’bout? He is headed to Manteca where he’ll be able to buy a downright fancy place. Bit of change from Cambridge though.

Comment by Muggy
2014-05-20 03:53:04

Unless it’s a cheap house. Cheap houses solve problems.

Remember: HBB’ers have purchased real estate at $5/sq.ft.

Comment by Bill, just south of Irvine
2014-05-20 04:52:01

October 1990 was when I made the worst decision of my life. I signed the purchase agreement on a house.

Comment by goon squad
2014-05-20 07:01:00

Quoting Colonel Kurtz from Apocalypse Now:

“The horror… the horror”

2014-05-20 04:53:40

Fannie and Freddie Looking for 5% Home Price Growth in 2014

Freddie Mac’s outlook is for new home construction to increase by 18%, with an average house price appreciation moderating to an annual growth of 5% in 2014.

Comment by MrsLolaSoros
2014-05-20 07:32:48

Okay, here’s the thing, 5% growth is stall speed to negative. Investors come in for outsized bubble profits, not for 5 percent when it is iffy and there is a big downside possible. This prediction of 5 % is an admission that the outsized bubble profits are gone. This means investors are gone. This means the market is toast.

Those investors didn’t buy to become SFH landlords. That is not a viable business model in all but a tiny few cases. It only works with a very cheap purchase price. Without that, it all depends on the chance for outsized bubble profits.

Comment by rms
2014-05-20 07:39:38

“Fannie and Freddie Looking for 5% Home Price Growth in 2014″

So the GSEs will boost the value of their portfolio and yours with debt?

Comment by oxide
2014-05-20 05:30:34

OK. :razz:

Comment by goon squad
2014-05-20 07:04:15

Gonna sell some blood plasma again today to make the minimum payments on your Loan Depot and Blowe’s credit cards, eh debt donkey?

Comment by oxide
2014-05-20 08:29:59

Minimum payments really aren’t that much, but that’s about all I can get for the plasma anyway. When I want to make a dent in principle, I sell “other things.”

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Comment by Housing Analyst
2014-05-20 08:45:59

You’re getting more irrational by the day Mz. Craterton.

Comment by Guillotine Renovator
2014-05-20 10:09:03

Hehe. You’re a good sport, oxy.

Comment by goon squad
2014-05-20 05:50:08

Wall Street Journal subscriber paywall article

Mortgage, Home-Equity Woes Linger

Number of ‘Underwater’ Borrowers Is Down but Remains Elevated, Zillow Finds

“Nearly 10 million U.S. households remain stuck in homes worth less than their mortgage and a similar number have so little equity they can’t meet the expenses of selling a home, trends that help explain recent sluggishness in the housing recovery.

At the end of the first quarter, some 18.8% of U.S. homeowners with a mortgage — 9.7 million households — were “underwater” on their mortgage, according to a report scheduled for release Tuesday”

People like Bill in Los Angeles don’t have these problems

Because renters rule and loanowners drool!

Comment by Mr. Banker
2014-05-20 05:57:07

“Because renters rule and loanowners drool!”

True loanowners don’t drool. True loanowners own the loan.

Loanowers are the ones that drool.

Comment by MrsLolaSoros
2014-05-20 06:18:30

It’s even more than this 10 million. This number assumes that the recent run up has set prices at this now higher level. It hasn’t. There aren’t any buyers for those 10 million underwater houses nor are there buyers for most of what is on the market at current inflated prices. When prices drop back down again from the echo bubble pop, then will they admit to there being 20 million underwater?

Comment by Housing Analyst
2014-05-20 06:21:12

Add in the millions who are currently making no payments and still living in the shack.

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Comment by MrsLolaSoros
2014-05-20 07:34:17

And with 3 million baby boomers retiring and downsizing every year for the next 20 years, ask Gundlach what he’s doing.

Comment by j-j-j-joe
2014-05-20 06:33:33

“People like Bill in Los Angeles don’t have these problems”

“People like Bill” do have these problems. Bill himself was married and owned a house in the past. It’s great that he found a new arrangement that works better for him and is generally superior in a number of ways.

Very few people actually swear off marriage and a house straight out of the gates of life. The single/renter types on HBB mostly learned their lesson — they weren’t born with skeptical views of marriage/home ownership.

Comment by Housing Analyst
2014-05-20 06:34:11


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Comment by goon squad
2014-05-20 06:47:09

Denver Post - Millennials seen avoiding three big liabilities

“Where some see a once-bitten, twice-shy generation, Englewood-based certified public accountant Mark Paller, himself a parent of two millennial daughters, sees a generation not with low risk tolerance but with different risk tolerance.

“What I see is that they’re investing in themselves first,” Paller says. “They’re trying to circumvent the big contingent liabilities of life that they’ve seen their parents and grandparents experience. Those contingent liabilities never show up in a balance sheet.

“One of the biggest is divorce. A lot of millennials come from divorced families. And they saw not only their emotional worlds explode, but a lot of times they also saw their financial worlds explode.

Two other such contingent liabilities he says provide millennials with negative impacts on balance-sheet investments: bad health and “bad children,” as in kids whose problems can weigh the family down.

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Comment by scdave
2014-05-20 07:15:55

and “bad children,” as in kids whose problems can weigh the family down ??

I believe this may be true particularly if it happened in a well structured environment…It makes one wonder, why would he/she do this when they have every opportunity going for them ?? Only conclusion you can draw is that its random…You just never know…So, the way to avoid the randomness of it, hence, no children….

Comment by goon squad
2014-05-20 07:22:25

“bad children”

I went to high school with one, his first trip to rehab was at age 14. His parents spent thousands and thousands of dollars on rehab, legal bills, wrecked cars, et cetera before he died of an Oxycontin overdose at age 26.

See also the multitude of recent articles about the new heroin epidemic in America (that wasn’t an “epidemic” until white kidz started dying on it)

Comment by MrsLolaSoros
2014-05-20 07:38:40

Millennials seen avoiding three big liabilities.

Ironically, when the Millenials were first talked about as a generation by Strauss and Howe back 20 plus years ago, the prediction was that they would be another GI generation, just like the WWII generation. Very civic minded, group oriented, etc. it was because they were being raised by pragmatic Gen X parents and not hippy dippy idealist boomers. Not exactly working out like that.

Comment by tresho
2014-05-20 07:45:41

the prediction was that
most such predictions will turn out incorrect.

Comment by oxide
2014-05-20 09:11:08

And yet, a hundred large in college loans is not seen as a liability, but as a “investment in themselves.” :roll:

Comment by RioAmericanInBrasil
2014-05-20 10:54:06

most such predictions will turn out incorrect.

Ask Rasmussen about predictions.

Comment by MightyMike
2014-05-20 11:07:11

I believe this may be true particularly if it happened in a well structured environment…It makes one wonder, why would he/she do this when they have every opportunity going for them ?? Only conclusion you can draw is that its random…You just never know…So, the way to avoid the randomness of it, hence, no children….

I went to high school with one, his first trip to rehab was at age 14. His parents spent thousands and thousands of dollars on rehab, legal bills, wrecked cars, et cetera before he died of an Oxycontin overdose at age 26.

I’ve seen this sort of randomness in a couple of families. You might have one young guy dying of an overdose while his brother is an upstanding citizen who has a good job, avoids trouble with the police, etc.

Comment by goon squad
2014-05-20 11:27:05

Yup. His older brother was my college roommate. With the younger brother, he was so far gone it was just a matter of time before when he checked out for good.

Comment by Blue Skye
2014-05-20 06:57:13

20 million families stuck in homes….

and the banks are not converting those who stopped paying their mortgages into REOs because they cannot show the losses on their books. Without the REOs, listings are down and average asking prices are up. This is the most perverted “recovery” imaginable.

The Fed now plans on holding their massive GSE MBS purchases on their books for eternity because they cannot show the losses on their books. Instead, they are paying record dividends to the Treasury!

Comment by RioAmericanInBrasil
2014-05-20 10:58:48

(Banks) cannot show the losses on their books…This is the most perverted “recovery” imaginable.

It’s an example of what happens to a system captured 34 years by a corporatist, supply-side “religion”.

If all policies are slanted to only help the very rich and the banks…….that’s exactly what those policies will do - at our long-term expense.

“I’m shocked, shocked……”

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Comment by Blue Skye
2014-05-20 11:50:41

So, the global credit mania was caused by local policies, everywhere! Thanks for the tip.

Comment by RioAmericanInBrasil
2014-05-20 11:57:17

So, the global credit mania was caused by local policies, everywhere!

How could the global credit mania not be cause by “local policies” pursuing a a corporatist, supply-side “religion” in those “local” regions ?


Do you understand the question?

Comment by RioAmericanInBrasil
2014-05-20 13:26:41

So, the global credit mania was caused by local policies, everywhere!

How the global credit mania not be caused by “local” corporatist, supply-side policies…”everywhere”?

(You won’t understand the question.)

Comment by RioAmericanInBrasil
2014-05-20 13:42:39

So, the global credit mania was caused by local policies, everywhere!

The world followed our lead. Or more correctly, The USA was the first to follow the now failed SupplySide/Globalization false religion.

Deregulated, Laissez-Faire, Trickle-Down Economics Destroyed U.S. Dominance

…..But there we were, back in 1989, with our deregulated, laissez-faire, trickle-down, financialized economic philosophy of the Reagan-Bush era, the “voodoo economics” that thrives only by inducing debt fueled overconsumption. Like tent evangelists, we were preaching globalization to the world and giving each other high fives and belly bumps over the defeat of socialism by the Shining City upon a Hill……

…This challenge of global integration really amounts to waiting out the growth in emerging market demand to offset some of the excess supply. In the interim, we must do our part to generate demand – but, please, not through more household borrowing or over-stimulation of the private sector. We need to generate demand through higher aggregate income – and that means putting our people back to work via the only entity left to provide additional employment.

Comment by RioAmericanInBrasil
2014-05-20 13:44:14

(You won’t understand the question.)

LOL. That was funny!

How COULD the global credit mania not be caused by “local” corporatist, supply-side policies…”everywhere”?

Comment by Blue Skye
2014-05-20 18:31:56

comment deleted by poster

Comment by MrsLolaSoros
2014-05-20 19:32:43

All this Lola pimpin. What about the 8 years of a Slick Willy? I thought times were great then, but now it is just glossed over as if it didn’t happen and instead it has been one long Reagan Republican period for 30 years. And Ole Bubba came along before you can blame everything on Bush II. He presided over the tech mania which was also fraud.

Slick Willy and the Messiah, i. e. Demos, got 12 of the last 20 years and Hillary’s hubby had plenty of time to stop any Reagan policy but didn’t. Looks like you’re blaming the wrong party, shill.

Comment by goon squad
2014-05-20 06:13:46

Latest Amy Hoax piece on MarketWatch

Your kids decide when you buy a home

Report: today’s parents make major purchasing decisions around the kids

“You may think you’re the one calling the shots about where and when you move next. You’re wrong.

As it turns out, it’s likely your kids are the ones pulling the strings.

That’s according to survey results from Coldwell Banker Real Estate, released on Tuesday, which found that 79% of Millennial parents (between the ages of 18 and 34) and 70% of Generation X parents (between the ages of 35 and 49) make major purchasing decisions around their children.”

People like Bill in Los Angeles don’t have these problems (sorry Muggy)

But Mr. Banker wants you to commit financial suicide, because it’s “for the children”

Comment by MrsLolaSoros
2014-05-20 07:41:10

Parents make decisions based on kids. In other news, the sun rose this morning, IN THE EAST!

Comment by goon squad
2014-05-20 07:59:29

It’s an Amy Hoax article, were you expecting better?

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Comment by rms
2014-05-20 08:01:46

“Your kids decide when you buy a home”

Does Amy have any children, or is this barren advice?

Comment by oxide
2014-05-20 09:14:01

We haven’t seen Overtaxed in a while. I wonder how he’s doing.

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Comment by rms
2014-05-20 11:47:52

“I wonder how he’s doing.”

Probably very busy like most high income earners.

Comment by Muggy
2014-05-20 19:09:56

Maybe he’s enjoying a new waverunner on the intercoastal waterways of Florida.

This is a reasonable way to spend your hard-earned bubble dollars, IMHO.

Comment by Muggy
2014-05-20 13:48:34

“People like Bill in Los Angeles don’t have these problems (sorry Muggy)”

Actually, we are probably better off than most families. We won the school choice lotto. I can live anywhere in the county and my kids will go to one of the best K-8 schools in the state. (Yes, I realize the irony of this, as I work in public education. Think of me as a guided-missile Libertarian.)


Comment by AbsoluteBeginner
2014-05-20 19:53:18


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Comment by RioAmericanInBrasil
2014-05-20 10:39:52

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

And if that’s the case, you’ve led a pretty lucky life.

Comment by MrsLolaSoros
2014-05-20 19:33:51

Please tell us the worst decision of yours, besides posing for a webcam.

Comment by Housing Analyst
2014-05-20 02:46:27

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

Comment by goon squad
2014-05-20 06:54:43

“I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.”

Comment by Jokes on you
2014-05-20 09:14:02

I usually throw it in the air at the local gent’s club.

Comment by Guillotine Renovator
2014-05-20 10:40:51

Makin’ it rain, Pacman?

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Comment by Combotechie
2014-05-20 03:57:12

Here’s a thousand words:

Read ‘em and weep.

Comment by scdave
2014-05-20 07:24:22

I am not quite sure what M2 means so, tell me Combo, delineate what M2 actually means…The chart is pretty dramatic…Lowest in 50 + years…

Comment by scdave
2014-05-20 07:26:00

I went to Wiki for the answer….

Comment by Housing Analyst
2014-05-20 07:26:50

It’s dramatic in the same way that the charts showing housing demand collapsing to 19 year lows.

Comment by Housing Analyst
2014-05-20 04:57:11

“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.”


2014-05-20 04:57:21

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.

Comment by scdave
2014-05-20 07:36:50

in lieu of mortgage financing, and more a consequence of tight mortgage lending conditions suppressing overall transaction volumes ??

Its what I have seen with a number of people I know….As one example, I am not sure the rule is still in place but awhile back I was told by a friend and confirmed with a mortgage broker that I know that he could not refinance a residential house that he owned because he had more than four residential loans already…In other words, his income or net worth was irrelevant in the underwriting decision because the maximum loans you could have was four…

Comment by MrsLolaSoros
2014-05-20 07:43:27

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

Historically includes fog a mirror and no one bats an eye. They want t back.

Comment by oxide
2014-05-20 09:27:25

I have said that in the DC area, inventory is easy to find… IF you want to commute to a new build SFH in the boonies, or be all hip in a new build condo near a metro stop. But if you want a shady suburb SFH with a short-mid commute, your choice is a fixer-upper or a bidding war. Those cash buys are likey the fixer-uppers.

2014-05-20 05:02:43

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.

Comment by Carl Morris
2014-05-20 08:13:41

The most sought-after homes still underwater

They must not be THAT sought after then.

2014-05-20 05:08:20

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.”

Comment by Blackhawk
2014-05-20 06:56:02

To be honest, what do you expect the old folks to do?

I’m amazed at how many acquaintances I know that have zippo saved. These are all guys in their 50’s.

When they say something about it I ask, what were you thinking? Their answer a blank stare and an acknowledgement that they weren’t. WTF!

Comment by RioAmericanInBrasil
2014-05-20 12:49:41

I’m amazed at how many acquaintances I know that have zippo saved. These are all guys in their 50’s.

The median wage has stagnated for 30 years while expenses have gone through the roof, pensions have been slashed and SocSec has not kept pace with inflation.

All of America’s “growth” and huge productivity gains have gone to only the rich.

The savings rate is not low just because of undiscipline.

Their answer a blank stare and an acknowledgement that they weren’t

Maybe they got sick or were sending their kids to school while their pay stagnated.

Comment by MrsLolaSoros
2014-05-20 19:35:23

Thank Slick Willy and Mo Credik Messiah for this. 12 of the last 20 it’s in their hands.

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Comment by FED Up
2014-05-20 23:18:43

Or maybe they bought some overpriced McMansion with a huge property tax bill. I see it all the time in the public records in my neck of the woods.

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Comment by Blue Skye
2014-05-20 07:22:34

One really must get all the debt-donkery out of the way before retirement. Then one must leave NJ.

Comment by RioAmericanInBrasil
2014-05-20 11:04:00

One really must get all the debt-donkery out of the way before retirement.

OK. But how could that reconcile with your anti-housebuying stance?

If you don’t own a home outright when you retire, renting is a very real form of rising and never ending “debt-donkery” too.

Comment by Blue Skye
2014-05-20 11:47:14

It’s in the news up here that your beaches are an open sewer. Disgusting.

So, paying a small fraction as much in cash is actually crushing debt! Thanks for the tip.

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Comment by RioAmericanInBrasil
2014-05-20 12:03:48

It’s in the news up here that your beaches are an open sewer. Disgusting.

So what? I’m not Brazilian, I don’t swim in the bay, my house has tripled in “value”, it’s never cold here and the women are beautiful.

And your momma wears combat boots. :)

Comment by RioAmericanInBrasil
2014-05-20 12:16:31

It’s in the news up here that your beaches are an open sewer.


Half of All U.S. Rivers Are Too Polluted for Our Health

A new report by the Environmental Protection Agency found that the majority of rivers and streams in this country can’t support healthy aquatic life and the trend is going in the wrong direction. The report labels 55 percent of the nation’s water ways as being in “poor” conidtion and another 23 precent as just “fair.” Only 21 percent of rivers are considered “good” and “healthy biological communities.” Even worse, the number of rivers and streams that qualify as “good” went down seven precent between 2004 and 2009..

…..The worst areas for river pollution are the Northeast and deep South, where a shocking 71 percent of rivers rated “poor…

4 states confirm water pollution from drilling
- USA Today…/01/…water-pollution…/4328859/
Jan 5, 2014 - … made about well-water contamination from oil or gas drilling, and pollution …

Toxic Waters - Series - The New York Times
Ruptures in aging water systems cause pollutants to seep into water supplies, but in many cities … Millions in U.S. Drink Contaminated Water, Records Show …

Exclusive: World’s most pristine waters are polluted by US › News › UK › Home News
by Cahal Milmo
Mar 15, 2014 - The American military has poured hundreds of tonnes of human sewage and waste water into a protected coral lagoon on the British-owned …

Comment by Blue Skye
2014-05-20 13:08:47

It’s in the news up here that your beaches are an open sewer.


Silly Brazilian.

Comment by Lola The Brazilian In DC
Comment by RioAmericanInBrasil
2014-05-20 15:48:34

Lola The Brazilian In DC

As if I care what your pic is?

Comment by Blue Skye
2014-05-20 16:27:11

What’s it like when there is an onshore breeze? We hear that a billion dollar gift to your riddled city to actually treat the sewage sort of went somewhere else, down the drain probably. How do you have international games in a cesspool? Whatever were they thinking?

Comment by Housing Analyst
2014-05-20 16:32:21

Thank you for finally posting a photo Riotard.

Comment by RioAmericanInBrasil
2014-05-20 16:45:29

What’s it like when there is an onshore breeze?

It’s fine where I live. I’m not poor. I love it when there is an onshore breeze, but the salt messes with things. I live in the Copacabana/Ipanema/Leblon Zona Sul. You know, where the 1% live. The main swimming beaches here are on par with LA or other American huge cities by a beach.

The pollution is in the Guanabara Bay, and has been there for 50 years. And it’s bad and has been bad for decades. It’s constricted.

Look at a map and read a book.

Whatever were they thinking (On having the Olympics)?

IDK. I guess they just wanted to triple and quadruple the value of the 1%’s houses? It worked. :)

Comment by Housing Analyst
2014-05-20 17:07:45

Oh lola…… you’re fibbing again.

Comment by Temeculan
2014-05-20 18:41:55

Just wondering what will happen in Brasil if the national team does not win the World Cup. Billions upon Billions of dollars have been spent and one of the main stadiums will not even be completed in time for the start of the tournament. There have been some rather large protests by the citizenry due to the cost overruns for this tournament, all while inflation rises and social programs are passed over for the sake of building new soccer stadiums. I predict social unrest should Brasil’s team fail like they did back in 1950. The Maracanaso will look like a walk in the park comapred to what could happen there now.

Comment by RioAmericanInBrasil
2014-05-20 19:03:59

Just wondering what will happen in Brasil if the national team does not win the World Cup.

Firstly, I don’t really care too much either way, because it’s a win-win or a lose-lose in some ways.

If they win, they win. Yea, pretty girls dancing in the streets and all that stuff. And twice this year and not just Carnival. And people will be happy and most these people deserve to be happy.

I predict social unrest should Brasil’s team fail like they did back in 1950.

If they lose, the country will cry in anguish. It will be sad. And there will be problems. Bank on it.

But it might be useful for Brazil in the long run because it will expose their understandable frustration in other areas. These nice people put up with too much corruption and inefficiency crap. And have forever.

Do you think I think it’s a bad thing Rio’s pollution and Brazil’s corruption are getting shoved back in their face on an international level? Or that I’m embarrassed for them or me because I happen to live here?

If any of you think so, well think again. Some time wake-up calls hurt. I’m for the USA all the way in the cup. If the USA gets knocked out, then I’m for Brazil or Brasil as they say here. But whatever happens, I predict it’s going to be one hell of a ride. I usually go back home to the USA for the 4th of July. Not this year.

Comment by MrsLolaSoros
2014-05-20 19:38:21

DC closes down for the 4th?

Comment by RioAmericanInBrasil
2014-05-20 15:58:43

One really must get all the debt-donkery out of the way before retirement.

How could that reconcile with your anti-housebuying stance?

It can’t.

You are not consistent on debt, economic policies’ effects nor the scope of man’s environmental pollution. Your narrow politics wrap you in a fog of inconsistency.

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Comment by Blue Skye
2014-05-20 20:02:36

“You are not consistent on debt…”

Oh, gasp.

Comment by Housing Analyst
2014-05-20 05:37:23

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

Comment by Jingle Male
2014-05-21 05:19:41

More lies from HA!

SFR prices in Encino have gone from $391/SF to $433/SF in the last year. That is an 11% increase. HA, Ha, ha, ha………

HA is such a liar and so misleading.

Comment by Housing Analyst
2014-05-21 06:00:59

Of course a newer house is going to cost more than a used up 30 year old shack.

Study the data J._Fraud. Study the data.

Comment by azdude
2014-05-20 05:38:23

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.

Comment by Mr. Banker
2014-05-20 05:48:19

“Freedom’s just another word for nothing left to lose.”

Freedom awaits you. Total freedom awaits you!

Visit your local banker today and make it happen!

Comment by MrsLolaSoros
2014-05-20 06:26:59

Mo credik Mel won’t be able to bring back New Century financial or all those other fly by night, write down whatever you want on a mortgage application shops. They were the ones that enabled the fraud to drive up prices before. The big boys threw standards out the window in reaction to them. It is a different dynamic now. And it is too late as the worm has turned back to prices dropping in leading edge areas.

Comment by Oxide
2014-05-20 06:48:21

Buying a house IS a ticket out of serfdom… If you can stay there long enough to pay off the mortgage.

Comment by goon squad
2014-05-20 06:58:41

Keep dreaming, you’ll never be “paying off” anything.

Comment by Blue Skye
2014-05-20 07:33:41

Question: Excuse me kind Sir, is that road marked “Debt Slavery” the road to Freedom?

Answer: You’re already in Freedom lad. That road does lead back here eventually, but it is a dangerous path and exhausting.

Comment by MightyMike
2014-05-20 11:13:54

Ah, my friends from the prison, they ask unto me
“How good, how good does it feel to be free?”
And I answer them most mysteriously
“Are birds free from the chains of the skyway?”

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Comment by rms
2014-05-20 12:01:56

There are no chains stronger than self-pity.

Comment by MrsLolaSoros
2014-05-20 07:49:19

If you can stay there long enough to pay off the mortgage.

If people stay that long, the housing market collapses. And the value of what they paid off collapses also.

I borrowed on my engagement ring.
Then I borrowed on my car.
Then I borrowed on my house.
Then I borrowed from my 401k.
What’s left I can borrow on, my a$$?

This is the problem.

Comment by Blackhawk
2014-05-20 07:02:18

Bottle of wine and a stogie? Sounds like a plan for me.

Comment by Bill, just South of Irvine
2014-05-20 07:28:05

So are you going to saw through a chunk of stucco and wood and sheet rock and take in a piece of your house to total wine and trade it in on a Napa Valley Silver Oak Cab?

Comment by Housing Analyst
2014-05-20 07:35:17

^ there it is. :clapping:

Comment by tresho
2014-05-20 07:37:48

For the last 6 weeks I’ve been sawing through a chunk of wood framing, paneling and aluminum, stacking the pieces in my backyard, and filling my curbside trash bin weekly with whatever fits. Sometimes I take advantage of the unused space in my elderly next door neighbor’s bin. Aka: demolishing an old truck camper

Comment by Neuromance
2014-05-20 08:34:36

Step 1: Pay down the housing debt, with interest (”build equity”).

Step 2: Take out a loan against the amount you paid off.

Step 3: Pay down that second loan with interest, and then continue working on paying off the original loan, with interest.

Step 4: Profit…?


Comment by Blackhawk
2014-05-20 15:01:59


No way, I’ve been saving my ¢¢¢ so I could pay with coin.

My favorite wine is Bogle Merlot, relatively cheap but very pleasing. Then a La Flor Dominica Double Ligero cigar.

Have you had the chance to check out Happy Jack? My buddy said that you can find many nice homes to buy or to rent up there.

Comment by Bill, Just south of Irvine
2014-05-20 19:55:07

Yes I have found a couple of very nice houses in Happy Jack on acreage that suits me. Out of maybe about 100 I looked at in an hour. I think that’s a good thing.

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Comment by Ben Jones
2014-05-20 20:03:31

Are you talking about Happy Jack Arizona? The trees are nice, but there are other issues.

BTW, there is no actual Happy Jack. That’s a post office and forest service office. In rural Arizona, houses are associated with the closest PO. Almost all the houses are in what’s called Blue Ridge, about 20 long miles from the post office. Blue Ridge is a development cut into the Mogollon Rim; lots of foreclosures there a few years ago. High priced second houses that Phoenix FB’s walked away from in a heartbeat. I’ve seen the snow down there so high you could walk roof to roof. Of course, now we’re in a drought, so the tall trees take on another meaning.

Comment by Bill, Just south of Irvine
2014-05-20 20:23:04

Probably the “issues” explain why the house prices there are lower than Flagstaff house prices.

Comment by Bill, Just south of Irvine
2014-05-20 20:24:14

Ben Jones,

I saw on azcentral something about a fire at “rock slide.” hope the fire at Slide Rock is far enough away from you.

Comment by Ben Jones
2014-05-20 20:41:51

I can see the smoke. It’s about 20 miles away and wind is toward Flag, not me.

Happy Jack is remote. No place to get food, etc. It snows a bunch because it’s on the Rim. But it has some of the tallest Ponderosa pines I’ve ever seen.

Comment by Whac-A-Bubble™
2014-05-20 22:47:53

“It’s about 20 miles away and wind is toward Flag, not me.”

Much better than our situation in SD last week, when one fire started about a mile to our south and a second one (the very destructive Cocos fire) about 10 miles to our northwest as the crow flies.

Comment by Housing Analyst
2014-05-21 06:03:58

“But it has some of the tallest Ponderosa pines I’ve ever seen.”

Nice to look at until it’s laying in your living room. Then it’s not so nice.

Comment by Bill, Just south of Irvine
2014-05-20 19:57:51

I mostly drink the cheaper stuff: Mouton Cadet Bordeaux blend of reds. There are two good things about equal outcome drab gray Commie France: its wine and it is the birthplace of Frederik Bastiat, the real liberal (not the socialists like riotard).

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Comment by Tarara Boomdea
2014-05-21 10:17:37


Mouton Cadet is the brand name of a popular range of modestly priced, generic Bordeaux wines, considered Bordeaux’s most successful brand. Created by Baron Philippe de Rothschild of the Rothschild banking dynasty…

Comment by goedeck
2014-05-20 20:51:22

Happy Jack lived in the sand on the Isle of Man.

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Comment by Housing Analyst
2014-05-20 05:39:24

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

Comment by Housing Analyst
2014-05-20 05:42:23

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

Comment by oxide
2014-05-20 05:42:45

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.”

Comment by Blue Skye
2014-05-20 07:35:31

Solutions abound where problems do not exist.

Comment by Housing Analyst
2014-05-20 05:48:58

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

Comment by Housing Analyst
2014-05-20 06:03:07

“Philly Realtor Charged With Stealing From Clients”

Comment by phony scandals
2014-05-20 06:05:29

‘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.”…/may/18/targeted-gun-sellers-say-high-risk-label-from-feds/ - 89k

Comment by Housing Analyst
Comment by j-j-j-joe
2014-05-20 06:24:26

“The most toothless criminal plea imaginable”.

Way to go, Comrade Holder.



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.

Comment by j-j-j-joe
2014-05-20 06:25:37

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.


“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.”

Comment by In Colorado
2014-05-20 12:02:18

Another day in flyover.

Comment by RioAmericanInBrasil
2014-05-20 16:33:31

Brownback’s tax cuts have failed …..He’s pretty fuc$ed if he can’t come up with some way to fix it.

Kansas can’t fix stupid. So Gov Brownback of Kansas blamed Obama for Kansas’ lack of revenue. The Republican party is bent. Here’s a perfect example of what has happened to the Red State Republican Party.

What does the GOP believe?
Brownback’s Republicans are not the GOP of Pearson, Hayden, Landon and Dole–May-19–2014

….. I now publicly confess that I am indeed a life-long, card-carrying Republican, born and raised in Republican territory, rural Harper County, Kan., in the small farming community of Bluff City.

My affiliation with the Republican Party led to my work with Republican officeholders in Kansas, as a cabinet officer for Govs. Bob Bennett and Mike Hayden, and as a legislative aide to U.S. Sen. Jim Pearson. I have admired the leadership of Republicans at the national level, such as Dwight Eisenhower and Ronald Reagan and Kansas’ own Alf Landon and Bob Dole.

Given this background, I have watched the current crop of Republican lawmakers in Kansas radically depart from what have been core principles of Republicans. Their actions prompt me to ask: What exactly do Kansas Republicans believe?

For example, I thought Republicans believed in balancing the budget. Eisenhower showed that the national budget could be balanced, an action rarely repeated since his time. Bennett and Hayden exercised fiscal discipline and carefully kept state spending in line with revenues while maintaining healthy balances.

In contrast, current state lawmakers proudly enacted reckless tax cuts, reducing revenues while allowing spending to grow. Before leaving town a couple of weeks ago, they approved a budget that by their own account spends $320 million more than is taken in during the current budget cycle. Their action ignored news that revenues already are $93 million short of projections for April and will likely drop even further. Their financial mismanagement triggered a downgrade in the state’s credit and may see fund balances plunge near zero within the year.

I also thought Republicans believed in fair and balanced taxation. Republican presidents, as well as Kansas governors, supported progressive income taxes throughout the 20th century. Republican Alf Landon campaigned for a state income tax in 1932 “not just as another tax” but as a way to reduce reliance on the property tax. As governor, he initiated a tax policy that moderated tax rates and balanced the tax burden among taxpayers and has been embraced by a long line of Republican governors and legislative leaders.

That all changed in 2011 when ALEC tax-cut guru Arthur Laffer came to Kansas. Republican lawmakers, led by the governor, now want to eliminate the income tax and shift the tax burden onto sales and property taxpayers. These lawmakers have adopted a tax policy that places more of the tax burden onto lower-income Kansans while dramatically reducing taxes for the wealthy.

Finally, I thought Republicans believed in former President Ronald Reagan’s ideal of a “big tent” political party, one with room for a diversity of views, attractive to independent-minded voters, and with leaders who embrace Reagan’s 11th Commandment: “Thou shall not speak ill of any Republican.”

The Kansas Republican Party has abandoned the big-tent philosophy and largely relinquished its soul to a few ideological groups. The views of the state chamber, Americans for Prosperity, Kansans for Life and the Kansas State Rifle Association have more say in what state officeholders believe today than long-standing party principles. These groups control the party’s agenda by targeting dissenters in primary elections and then disciplining those elected with single-issue scorecards and litmus tests.

And Gov. Sam Brownback has led Republicans in violating Reagan’s 11th Commandment by joining with political allies and campaigning against legislators of his own party.

These Republican officeholders have turned their back on their party’s history and on those who have shaped that history. This year’s elections promise to be a watershed opportunity for Kansas voters to embrace or reject this radical “red-state” experiment with their future.

Comment by j-j-j-joe
2014-05-20 06:29:17

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


Filed under: Boomers gonna boom.

Comment by Combotechie
2014-05-20 06:58:14

“Home equity is key to Americans’ retirement security, so it’s crucial to responsibly offer reverse mortgages,”

Which means if a retired person cashes out his home equity he cashes out his security.

Whatever happened to the merits of imputed rent?

Comment by Housing Analyst
2014-05-20 07:03:47

Signing up for a reverse mortgage is like sitting in a bunker waiting for a hand grenade to drop in.

Comment by j-j-j-joe
2014-05-20 07:10:14

“On a $500,000 home, you might pay $2,500 for mortgage insurance, $3,000 in closing costs, and a $6,000 origination fee, says Edinboro University associate finance professor Shaun Pfeiffer, who co-authored the Evensky study. ”


It just seems crazy to me that the same person who has a paid off 500k home would pay fees like the above just to give themselves a fairly small trickle of money coming in each month.

Why not sell the (probably large) house and downsize or rent something that is ideal for your 60s, 70s, 80s?

Comment by Housing Analyst
2014-05-20 07:11:25

Because they’re underwater?????

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Comment by oxide
2014-05-20 09:57:44

HA, if they were underwater, then there’s NO equity to mortgage out. :roll:

Joe, it’s an emotional reason. Almost always, it’s an elderly widow who is too distressed to leave the home where she raised her family. So the kids or the bank set her up to age in place.

I think that reverse mortgages are going to die out with the boomer generation, if not before. Younger women can handle money and have probably changed houses or jobs several times, so another move to assisted living won’t faze them.

Comment by goon squad
2014-05-20 10:49:44

“Younger women can handle money”

They may not be doing a good job of handling their own but they have plenty of ideas about how they’d like to handle mine.

Comment by Housing Analyst
2014-05-20 11:03:45

“HA, if they were underwater, then there’s NO equity to mortgage out. ”

You don’t say! Are you sure?

Comment by MightyMike
2014-05-20 11:29:12

They may not be doing a good job of handling their own but they have plenty of ideas about how they’d like to handle mine.

There’s a good little joke in there somewhere about women handling you.

Comment by rms
2014-05-20 12:09:35

“They may not be doing a good job of handling their own but they have plenty of ideas about how they’d like to handle mine.”

Heck, go ahead and spend it on the ladies. What else is it good for anyway?

Comment by MrsLolaSoros
2014-05-20 07:52:27

3 million Boomers a year hitting 65 for the next 20 years. Remember Jim Cramer? Sell, sell, sell…

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Comment by j-j-j-joe
2014-05-20 11:02:14

There are only about 10 more years of boomers to hit age 65.

After that you start to cut into Gen X.

Comment by In Colorado
2014-05-20 12:04:07

3 million Boomers a year hitting 65 for the next 20 years. Remember Jim Cramer? Sell, sell, sell…

But how many of them actually own stocks?

Comment by Housing Analyst
2014-05-20 14:47:03

They spent it all on rapidly depreciating houses. An estimated 35 MILLION of them but likely more because the fools doubled down and bought a second.

How’d you like to be looking down the barrel at those kind of losses? ;)

Comment by MrsLolaSoros
2014-05-20 19:43:03

There are only about 10 more years of boomers to hit age 65.

1946 maybe 45 was beginning. It goes thru 1964. 2029. 15 more years, so we split the difference. 48 million more retiring and downsizing? 24 million couples? 1/2 own homes?

Comment by Neuromance
2014-05-20 08:26:06

They can and should boom all they want. The problems are the negative externalities - the costs imposed on the rest of the taxpayers, the “financial pollution” - that has been built into the system. These externalities guarantee that the FIRE sector gets paid, but imposes the costs on the taxpayer.

“Privatize the profits, socialize the losses” at its finest.

If adults wanna boom, fine. I just don’t want the government spraying the effluvia at me.

Comment by MrsLolaSoros
2014-05-20 06:31:33

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.

Comment by Housing Analyst
2014-05-20 06:35:35

“Accidental Landlord”

This 800lb gorilla that the balloonheads desperately run from.

Comment by Carl Morris
2014-05-20 08:21:45

Just last night my sister in law posted to FB that she gets to spend today cleaning their old house that they moved out of a year ago top to bottom. Apparently just a year with renters can be tough on a place. She’s extremely unhappy and saying “never again”. Meanwhile a different sister and brother in law are spending their vacation in a couple of weeks rehabbing their old house that renters have been in for a few years instead of doing something fun with the kids. But I suspect they think they’re all going to retire rich thanks to all this extra effort.

Comment by tresho
2014-05-20 08:25:26

she gets to spend today cleaning their old house that they moved out of a year ago top to bottom
If she can do that in a single day, she is either (1) Superwoman or (2) lucky enough that so little damage was done that an ordinary human can clean it up that fast.

Comment by Carl Morris
2014-05-20 08:28:03

Well…we’ll see. I’d say odds are high that it morphs from a one day project into a one week or so project. But if she’s a good estimator then maybe it’s not really that bad and she just had unrealistic expectations of how the renters would leave it?

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Comment by tresho
2014-05-20 08:33:07

maybe it’s not really that bad and she just had unrealistic expectations of how the renters would leave it?
If she can indeed do it all in a single day, I think that explanation is a good one.

Comment by Tarara Boomdea
2014-05-20 10:01:14

I’d say odds are high that it morphs from a one day project into a one week or so project.

Carl is correct.

Each time we’ve left a rental, it took me a solid week to clean and I left the places cleaner than they were when we got them.

Comment by Carl Morris
2014-05-20 12:18:40

Just an update, this was just posted…apparently it has now morphed:

Basement is completely trashed. Apparently their dog was potty trained to pee and poop on the carpet. They didn’t clean anything so there is about 11 months of dust, scum and so on build up. Apparently their toilet aim was not great either…it is beyond overwhelming. I tried to do some cleaning this morning and after attempting to clean around the toilet, I realized even the water has been disconnected. Could not even wash my hands…Got utilities all set up again and we’re hoping to be able to get the place looking somewhat decent by Friday.

Comment by Tarara Boomdea
2014-05-20 12:59:52

Just an update, this was just posted…apparently it has now morphed

Wow. Creeps.

A week is just for thorough cleaning (pulling out refrigerator, stove, cleaning molding, corners of closets, windows, grease on garage floor, etc.)

I have heard of property managers keeping deposits because of dirt in between a cabinet and stove.

My big problem is figuring out how to repair the corners of a formica counter gauged out by pain killered up mother with her scooter.

Comment by Oddfellow
2014-05-20 06:32:15

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?

¨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.¨

Comment by tresho
2014-05-20 07:30:50

cabin-like, with no basements
As if lacking a basement was a bad thing. IMNSHO, a basement is an instant swimming pool, just add water. If you want a fallout/tornado shelter, build one, forget the basement. If you want more interior living space, build a bigger house, above ground.

Comment by Oddfellow
2014-05-20 10:32:38

Basements are optional in milder parts of the country, not so much in the places with colder winters. I mentioned it because it would affect the square foot cost, if you had to have one.

Comment by Blue Skye
2014-05-20 07:41:45

Just one thing, if you are raking in $750/mo, you qualify for government housing assistance I would think. We’ve got some “tiny houses” around here and they rent for $500/mo. because that is what the government will pay.

Comment by MrsLolaSoros
2014-05-20 07:55:57

Building smaller is one way to try to keep the price per sq foot high so people can afford to buy. No one wants that crap though. hGTV has seen to this. Another way people can afford to buy is if price per square foot drops.

The builders in SE PHX don’t seem to be trying this build smaller stuff any more. They have been back to building the same old stuff from what I see.

Comment by cactus
2014-05-20 09:07:18

The builders in SE PHX don’t seem to be trying this build smaller stuff any more. They have been back to building the same old stuff from what I see.”

They put too many windows in these desert homes, who wants 12 big west facing windows when its 115F out as the sun sets ? You have to go and put 90% sun shade over them.

I think designers could do much better for a desert home.

Comment by goon squad
2014-05-20 06:34:32

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!

Comment by MrsLolaSoros
2014-05-20 07:57:42

Will they be marching off to war soon because they are the new GI Generation? The original predictions were for some huge crisis around 2015 if I recall from the book Generations by Strauss and Howe.

Comment by In Colorado
2014-05-20 12:06:47

There is no shortage of Millennials willing to volunteer to “serve”.

Comment by Oddfellow
2014-05-20 10:52:19

Confessions of a millennial who hasn’t invested a dime in stocks

¨My colleague John Aziz wrote an interesting piece last week lamenting the fact that millennials aren’t investing in stocks. This is not because they are less wealthy than previous generations, which is what I would have assumed. Though millennials aren’t nearly as rich as their parents, even those who do have wealth tend to sit on their money:

[T]he data shows that even millennials who do have the money to invest are avoiding stocks. A UBS survey released earlier this year found affluent millennials hold 52 percent of their money in cash and 28 percent in stocks, compared with 23 percent and 46 percent for older people. So even affluent young people today are putting their money into bank accounts and securities that pay close to zero interest. [The Week]

I can’t speak for those who are actually wealthy, but I do have slightly more than no money for the first time in my life. Indeed, since the bottom half or so of the income ladder has basically no wealth whatsoever, I’m probably well above the median. And just like Aziz says, I haven’t even bothered to open a savings account, let alone buy stocks.¨

Comment by frankie
2014-05-20 06:46:37

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.”

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%.

Comment by j-j-j-joe
2014-05-20 07:02:49

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.


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

Comment by LiberaceLOL
2014-05-20 07:10:13

You’re busy today.

Comment by Riley Kilo
2014-05-20 07:28:14

Fabulous time at Paddles last weekend Joe, let’s do it again soon!

XOXO Riley

Comment by In Colorado
2014-05-20 11:44:40

the average sales price on a home in London

I assume this average includes flats.

Comment by 2banana
2014-05-20 07:11:32

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


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.

Comment by Blackhawk
2014-05-20 11:45:17

Miami mayors = Illinois governors = permanent supply of fresh meat for the inmates.

Comment by MrsLolaSoros
2014-05-20 07:26:18

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 ?

Comment by tresho
2014-05-20 07:33:52

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.

Comment by Bill, just South of Irvine
2014-05-20 07:35:03

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%.

Comment by cactus
2014-05-20 09:15:18

Check this out. Almost a record for the S&P going up without a correction to the 200 day moving average.

Comment by Bill, just south of Irvine
2014-05-20 12:25:15

I am a student of market cycles. The longer this bull market, the bigger the correction ahead. If it stays flat for two or three years to shake out the weak hands, maybe that will serve as a correction. But it will depress growth stocks of all sizes of capitalization.

Comment by tresho
2014-05-20 07:44:41

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.

Comment by Housing Analyst
2014-05-20 07:55:36

Mortgage in her 50’s? This is a perfect example of the atrophy when a reverse mortgage/HELOC is written and executed on a rapidly depreciating asset.

There’s a trail of tears between that house and her new hovel.

Comment by frankie
2014-05-20 08:14:57

Is her new house a hovel?

Comment by tresho
2014-05-20 08:17:20

Is her new house a hovel?
I’m pretty sure she’s now renting an apartment. Hovel status, I don’t know.

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Comment by Housing Analyst
2014-05-20 08:29:06

They’re all hovels. All 135 million of them.

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Comment by tresho
2014-05-20 08:22:21

Mortgage in her 50’s?
She would have been in her early 30’s when she first moved in, & should have had 9 years to go on a 30-year mortgage (assuming that was what she had).

Comment by Housing Analyst
2014-05-20 08:37:16

Hence the reason a 30 year debt sentence aka mortgage is a bad idea.

Remember this…….

If you have to borrow for 15 or 30 years, it’s not affordable nor can you afford it.

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Comment by Carl Morris
2014-05-20 08:26:32

The problem is that the older generation is still humiliated by the idea of getting kicked out. She left way too soon. She should have learned from the younger generation.

Comment by RioAmericanInBrasil
2014-05-20 13:51:42

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.

Europeans and Canadians would not understand that sentence.

Their health insurance has minimal co-pays and deductibles if any.

Comment by DonSterlin'
2014-05-20 16:41:18

She would be dead by now in Canada or Europe.

A wasterly comment deserves a wasterly response.

Comment by Neuromance
2014-05-20 08:49:34

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]

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.

Comment by Blue Skye
2014-05-20 09:15:24

“underserved communities…”

Interesting phrase. Those must be the ones where house prices are lower.

Comment by rms
2014-05-20 12:12:48

“Interesting phrase.”

+1 Indeed. Sounds expensive to my ears.

Comment by goon squad
2014-05-20 09:19:35
Comment by X-GSfixr
2014-05-20 09:24:02

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”

Comment by Neuromance
2014-05-20 14:17:06

“If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues,–
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie: Dulce et decorum est
Pro patria mori.”

“Dulce est Decorum Est” by Wilfred Owen

Comment by Blackhawk
2014-05-20 09:47:42

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.

Comment by goon squad
2014-05-20 10:07:13

Greatest non-alcoholic beverage ever made.

Goes great while lying on your back consuming groceries.

Comment by Blue Skye
2014-05-20 10:17:19

Yes. It used to be 5c. How much did yours cost?

Comment by Blackhawk
2014-05-20 10:23:27

$1.80 for 12oz

Comment by Blackhawk
2014-05-20 10:55:55

355ml actually.

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Comment by Blue Skye
2014-05-20 11:25:58

Ours were 6.5 oz. We hadn’t heard of the French method of measuring then.

Comment by RioAmericanInBrasil
2014-05-20 12:06:25

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

I had one Saturday here in real sugarland. Nice.

Comment by RioAmericanInBrasil
2014-05-20 12:43:09

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

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

Comment by rosie from the north
Comment by cactus
2014-05-20 14:32:13


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.”

Comment by Blue Skye
2014-05-20 14:41:09

Sorry Blake, it’s practically summer and we are still not building much of anything. Weakness in the first quarter is a good sign the other quarters will be fantastic? LOL.

Comment by Housing Analyst
2014-05-20 15:20:19

he is expecting that “home price appreciation, affordability and an aging housing stock in need of investment will continue to drive growth.”

Inflated housing prices will generate more growth? Hmmm…

Hey… I thought GE guys were supposed to be really smart. Especially a former GE attorney. I dunno. Maybe he should consult with his corporate comrade, former HD CEO and former boss and at GE power systems Bob Nardelli.

Comment by MrsLolaSoros
2014-05-20 19:47:55

I agree, boom boom on your own nickels Lola.

Comment by cactus
2014-05-20 14:35:32

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.

Comment by RioAmericanInBrasil
2014-05-20 14:52:37

“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

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….

Comment by Blue Skye
2014-05-20 16:35:16

You are, as has been defined on the HBB, living in the mania.

Why is Rio such an intentional cesspool? Is it Reganomics?

Comment by RioAmericanInBrasil
2014-05-20 16:53:49

Why is Rio such an intentional cesspool?

Because buying in the world’s “most beautiful city” in the few awesome and globally coveted areas of an “intentional cesspool” will help quadruple one’s net-worth in 6 years?

Is it Reganomics?

Great question. When there is very little supply of great housing and policies make the owners of that supply richer, well then that is a version of Reagan’s SupplySide economics.

Well done!

Comment by Blue Skye
2014-05-20 18:28:12

Of course you are triple up and then quadruple up in the matter of hours. This is mania. You fancy yourself a predator in a rain barrel/cesspool. Inheriting your mama’s house makes you a genius. Watch out for that inshore breeze.

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Comment by RioAmericanInBrasil
2014-05-20 18:50:40

Of course you are triple up and then quadruple up in the matter of hours

There’s a difference between net-worth and a house’s value.

It’s math and the reality of money and saving 3-4K rent every month. When one’s house doubles or triples and one has other money to invest, and one is saving thousands every month on rent, it’s possible to quadruple one’s net worth when one’s house “only” doubles or triples.

Is the math too hard to understand because of your politics?

Inheriting your mama’s house makes you a genius.

My momma lives in the USA and I’ve inherited nothing in Brazil/I’ve given Brazil much more than I’ve received or will ever. What makes a genius is IQ. (And quadrupling one’s net worth in 6 years to some people.)

You sir, are a semi-smart dude, getting a little old and crotchety and more clouded by your narrow politics every day. I see it. You were much less so a few years ago.

“Get off my lawn!” Oh sorry, you don’t have one.

(Don’t worry. Living in a house in the nice part of Rio, I don’t really have a lawn either.)

Comment by RioAmericanInBrasil
2014-05-20 20:30:13

saving 3-4K rent every month.

5 years flies by fast.

3K X 60 = 180K
4K X 60= 240K

6 years even faster.

Comment by Housing Analyst
2014-05-21 06:02:20

Lola LOL^

Comment by Can Bubble
2014-05-20 19:02:07

I’ll be in Rio in 28 days!

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Comment by RioAmericanInBrasil
2014-05-20 19:07:55

I’ll be in Rio in 28 days!

Nice! If you need any tips on the town, or a great Brazilian bilingual guide (I’m not Brazilian) feel free to ask.

Comment by MrsLolaSoros
2014-05-20 19:53:57

will help quadruple one’s net-worth in 6 years….

Ah, ha, HA. You screwed up with your lies and now have to backpedal. After maintaining you are some type of successful businessman, a “high net worth individual,” you screw up and post something that shows all you got is your house for net worth. Then you go backpedalling trying to rationalize your screw up.

Inheriting Yo momma’s house ain’t genius. Hahhahaha. Made my night!

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Comment by Housing Analyst
2014-05-21 10:13:06

What can a house in the slums of Baltimore possibly be worth?

Comment by phony scandals
2014-05-20 14:53:05

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

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

( – 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

“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

“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

“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.…/federal-biosurveillance-plan-seeking-direct-access-americans - 56k -

Comment by RioAmericanInBrasil
2014-05-20 16:22:13

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

Not everything is a conspiracy folks. Aand I thought you guys on the right were always screaming about “cutting costs”.

Jul 15, 2013 - Electronic Health Records Help Cut Costs For Mass. … health costs, a study published Monday in the Annals of Internal Medicine reported.

Health Systems Use ‘Big Data’ to Cut Costs, Improve Quality
… radiology, and electronic medical records to enhance the predictive accuracy.

3 Ways to Save Lives and Cut Healthcare Costs
— Health ……/how-to-save-lives-and-money-at-the-same-t…

Electronic Medical Records Drastically Cut Health Care Costs…/electronic-medical-records-drastically-cut-health-1174...
Oct 18, 2013 - Everybody wants to cut the costs of health care, and a new study shows the most effective way to cut medical costs is for all health care …

Comment by phony scandals
2014-05-20 17:30:38

“Not everything is a conspiracy folks”

That’s right, some things are phony scandals.

VA hospital officials shredded documents to hide existence of secret waiting lists that killed U.S. veterans…_Veterans_Affairs_secret_waiting_list_shredded_documents.html - 77k -

Tuesday, May 20, 2014 by: J. D. Heyes
Tags: Veterans Affairs, secret waiting list, shredded documents

VA Spends Close to $500 Million on Conference Room, Office Makeovers Under Obama

President requests 3 percent increase for VA budget

BY: Mary Lou Byrd
May 15, 2014 4:59 am

President Barack Obama has increased the Department of Veterans Affairs’ budget each year since he took office, claiming the funds would give veterans the health care they deserve. However, an analysis of records show the agency has spent close to $500 million on office furniture under the Obama administration.

This upcoming fiscal year Obama requested a 3 percent increase for the Veterans Affairs budget. Obama’s FY 2015 budget request points out he has increased the VA discretionary budget by 35.2 percent since 2009 so veterans continue to access necessary services.

“VA’s 2015 budget provides the necessary resources to allow us to serve our veterans who selflessly served our nation,” stated the president’s FY 2015 budget.

As the embattled agency faces charges of record tampering and neglect of veterans, records reviewed by the Washington Free Beacon show the VA has not neglected upgrading and decorating its offices throughout the country.

The VA has spent a total of $489 million to upgrade conference rooms, buy draperies, and purchase new office furniture during the past four-and-a-half years.

A total of 15,010 contracts were awarded for office furniture by the VA for Fiscal Years 2010 through 2014.

“This is just one of many misplaced priorities at the VA, and unfortunately, I think we’ve only begun to scratch the surface,” Sen. John Cornyn (R., Texas) said in an emailed statement. “I will not stop until the VA is investigated top to bottom, and new leadership is brought in to clean up this dysfunctional agency.”

One contract awarded $6.8 million for construction of a conference room and facilities at its Carol Stream, Ill., office. That renovation is ongoing and is expected to be completed next April.

The VA’s San Juan, Puerto Rico office spent $1.8 million on new office furniture, and one of its Virginia offices spent $1.9 million on “systems office furniture.” That project is expected to be completed at the end of this month.

Another $1.4 million is currently being spent on a yearlong third floor renovation project for the “design, purchase/installation of furniture” in Saint Petersburg, Fla. That is expected to be completed on Sep. 17. The Free Beacon found a second contract for the same office signed earlier this year in which $267,131, for “non-upholstered wood household furniture manufacturing.”

The VA also spent $1.8 million for “systems furniture” in Philadelphia; $1.8 million for “multi-functional, mobile, enhance learning space” in Tampa; $1.8 million for “showcases, partitions, shelving” for its Los Angeles office.

To make the office makeovers complete, draperies, roller shades, and cornice boxes were also purchased. The VA spent $10.7 million in the past five fiscal years on curtains and draperies.

Some of those contracts include $454,085 for “cubical curtains and draperies” for its Brecksville, Ohio, office. The Pittsburg, Pa., VA office spent $382,879 on window shades which were just installed in January.

Instead of draperies, the VA’s Los Alamitos office preferred cornice boxes and roller shades. The contract shows they spent $106,615 on its window treatments.

The Free Beacon also found pricey filing system expenditures. For example, $1.7 million was spent on a filing system for the California office. The reason the VA is spending high amounts on filing systems is unclear, since Obama’s FY 2015 budget included $138.7 million in Veteran Claims Intake Program for the conversion of paper documents into eFolders.…/ - 53k -

Comment by MightyMike
2014-05-20 18:04:03

The VA has spent a total of $489 million to upgrade conference rooms, buy draperies, and purchase new office furniture during the past four-and-a-half years.

Is that a lot of money for an agency the size of the VA? Who knows?

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Comment by RioAmericanInBrasil
2014-05-20 18:05:37

President Barack Obama has increased the Department of Veterans Affairs’ budget each year since he took office

That ba$tard. Obama should have gone to two major wars, and then shafted the vets. “Merica”

Bush Honors Veterans By Slashing Veterans Affairs Budget
Jun 1, 2004 - President Bush therefore can take advantage of this fact and can continue to cut the VA program with little regard about whether or not a …

Bush plan would cut veteran funding | The San Diego Union …
Feb 13, 2007 - WASHINGTON – The Bush administration assumes cuts to funding for veterans’ health care two years from now – even as badly wounded …

Bush Administration underfunded veterans’ health care by $2 billion. The Bush Administration’s 2004 budget underfunded veterans’ health care by nearly $2 billion. (”Vets Health Low on Bush’s Priority List,” The Hill, September 17, 2003; “Support for Troops Questioned,” Washington Post, June 17, 2003; U.S. Department of Veterans’ Affairs, September 2002)

Bush Administration budget cuts force more than 200,000 veterans to wait for health care. Over 200,000 United States veterans have to wait more than six months for a medical visit because of health care shortages. (”VA Health Care Funding Alert,” Veterans of Foreign Wars of the United States Press Release, January 31, 2003)

Bush Administration cuts $1.5 billion from military family housing. The Bush Administration cut $1.5 billion for military family housing, despite Department of Defense statistics showing that in 83,000 barracks and 128,860 family housing units across the country are below standard. (”Nothing But Lip Service,” Army Times, June 30, 2003; “House Appropriations Committee Approves $59.2 Million for Ft. Hood,” U.S. Rep. Chet Edwards Press Release, June 17, 2003)

Bush Republicans support millionaires instead of military veterans.
Bush allies in Congress stopped efforts to scale back the tax cut for the nation’s millionaires by just five percent - a loss of just $4,780 for the year - in order to restore this funding for military family housing. (”The Tax Debate Nobody Hears About,” Washington Post, June 17, 2003)

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Comment by RioAmericanInBrasil
2014-05-20 20:52:50

President Barack Obama has increased the Department of Veterans Affairs’ budget each year since he took office,

Obama increased the VA budget? Maybe Obama should start 2 major wars and then propose to cut the VA budget as did Bush?

Veterans face consecutive health care budget cuts ……/20070212-111911-3968r/

Feb 12, 2007 - The Bush administration plans to cut funding for veterans’ health care two years from now — even as severely wounded troops returning from …
Veterans face budget increase, then big cuts - NBC News…/t/veterans-face-budget-increase-then-big-cuts/

American Legion Commander: ‘I Blame Bush And Congress …
Mar 6, 2007 - “We are not pleased with the budget for the military and for the VA hospitals for our … Bush plans to cut veterans health care after 2008.

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Comment by goon squad
2014-05-20 15:55:58

Fast forward to 01:30 to skip the intro


Get tha money
Dolla dolla bill y’all”

Comment by goon squad
2014-05-20 16:30:53

Ice-T - Escape From The Killing Fields:

Comment by goon squad
2014-05-20 16:38:37

Ice Cube - AmeriKKKa’s Most Wanted:

And because it’s twofer Tuesday

Ice Cube - What They Hittin’ Foe?

Comment by goon squad
2014-05-20 17:53:37

Eminem - Drug Ballad:

think about it kidz…

Comment by RioAmericanInBrasil
2014-05-20 17:47:47

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”: $Priceless$

Comment by Can Bubble
2014-05-20 19:03:30

What stuff should I bring to Rio next month?

Comment by RioAmericanInBrasil
2014-05-20 19:10:15

What stuff should I bring to Rio next month?

Lots a money! (But I don’t really understand the question.) In regard to what?

Comment by AbsoluteBeginner
Comment by Whac-A-Bubble™
2014-05-20 19:52:47

Proposed topic for discussion starting early tomorrow if not sooner:

Is China’s Housing Bubble Beginning to Burst?

Comment by Whac-A-Bubble™
2014-05-20 19:56:58

Is China’s Housing Bubble Beginning to Burst?

By Christina Larson
May 19, 2014
Residential apartment buildings under construction in Qingzhou city, in east China’s Shandong province

Earlier this month, financial analysts from Japan-based Nomura Group (NMR) issued a grim report on China’s housing market: “To us, it is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be,” the report read.

Nomura—which has historically been bearish on China, as the Wall Street Journal observes—predicted that a downturn in the housing market, caused by oversupply and shrinking developer financing, could sharply impact China’s economy, perhaps even driving GDP growth to less than 6 percent in 2014.

China’s economy is vulnerable because property investment accounts for anywhere from 16 percent to 20 percent of gross domestic product, according to varying analyses.

Data released on Sunday by China’s National Bureau of Statistics show that an increasing number of major Chinese cities surveyed experienced month-on-month housing declines in April (eight cities) compared with March (four).

Hangzhou, the capital of eastern Zhejiang province, saw the steepest decline, with new-home prices dropping 0.7 percent in April. The other seven cities surveyed that reported declines were Ningbo, Wuxi, Wenzhou, Jinhua, Anqing, Ganzhou, and Huizhou.

Comment by Whac-A-Bubble™
2014-05-20 20:01:57

Is there a ticking time bomb at the Fed?

Comment by Whac-A-Bubble™
2014-05-20 20:03:32

Charles Plosser thinks there’s a ticking time bomb at the Fed
May 20, 2014, 3:48 PM ET

The way Charles Plosser sees it, the Federal Reserve is sitting on a ticking time bomb that could severely damage the economy unless the central bank reacts quickly to defuse the looming threat.

The Philadelphia Fed president, viewed as one of the bank’s leading hawks, is worried about some $2.5 trillion in “excess” reserves. That is, loanable funds available to individual or corporate borrowers through the nation’s banks.

The Fed has created these reserves through unpredented purchases of U.S. Treasurys and mortgage-backed securities, a strategy known as quantatative easing.

These reserves are just sitting in the bank system, basically doing nothing. That’s because demand for loans has been unusually weak amid an economic recovery that’s the slowest on record since the Great Depression.

“These reserves are not inflationary right now,” Plosser said in a meeting Tuesday with reporters in Washington.

Yet if borrowing begins to surge and those reserves start to pour out of the banking system, Plosser worries, “that’s going to put pressure on inflation.” The result: the Fed could be forced to raise interest rates faster and earlier than it would like and perhaps slam the breaks on the economic recovery.

The Fed tried to avoid such a problem in the past simply by not creating so much excess reserves in the first place. If the excess reserves did not exist, banks could not lend out too much money and trigger an inflationary spiral.

What’s different now is the reserves have already been created. So the Fed has to figure out how to withdraw the massive reserves it’s injected into the banking system without causing major economic harm in the process.

“One thing I worry about is that if we are late, in this environment, with all these excess reserves, the consequences might be … more dramatic than in previous times,” Plosser said. That’s central-bank speak for an economic fiasco.

The timing and strategy by which the Fed handles the drawdown in reserves could end up a major source of contention among central bank hawks and doves. “Our challenge is subtly different,” Plosser said. “We have to restrain the pace at which banks lend those reserves out.”

Go too fast and economic growth could get stunted. Go too slow and inflationary pressures would build rapidly. In the past, Plosser asserted, the Fed has almost always reacted too late. “If you study the Fed over the years, over its history, its always behind the curve.”

Comment by Whac-A-Bubble™
2014-05-20 20:04:33

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

Comment by Whac-A-Bubble™
2014-05-20 20:06:12

May 20, 2014, 4:52 p.m. EDT
U.S. stocks decline; Dow in triple-digit loss
Caterpillar slides on weak sales; SPDR S&P 500 Retail ETF falls 2.5%
By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) — U.S. stocks ended Tuesday with broad-based losses after disappointing earnings from TJX Companies, Inc, Staples, Inc. and weak sales numbers from Caterpillar Inc. weighed on investor sentiment.

Selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser, who said that Fed may need to act sooner rather than later should the economy accelerate.

Comment by Whac-A-Bubble™
2014-05-20 20:07:59

Asia Stocks live blog: Back down we go
May 20, 2014, 7:28 PM ET

Welcome to the Asia Stocks live blog, a running account of what the region’s share markets are doing, along with other news. Today, the region’s equities are expected to tip lower, if only because of the weak U.S. session, while Japan will get its latest trade numbers and a policy decision from the central bank.

Comment by Whac-A-Bubble™
2014-05-20 20:13:12

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

Comment by Whac-A-Bubble™
2014-05-20 20:17:14

The question these guys should ask themselves is not, “When should we stop buying so many mortgages?” Rather, it is, “Why on God’s earth did we ever get ourselves into the business of picking winners and losers in the U.S. economy?”

May 20, 2014 6:15 pm
NY Fed president floats change to exit strategy
By Robin Harding in Washington

One of the US Federal Reserve’s most influential officials has called for a change to its exit strategy from easy monetary policy.

William Dudley, president of the New York Fed, said the central bank should keep reinvesting in its mortgage portfolio until after it raises interest rates. The current exit strategy calls for stopping reinvestment before rates go up.

The call for the Fed to keep its mortgage portfolio larger for longer signals how exit strategy is now the most active policy debate at the central bank as the US economy gets closer to full employment. The possibility of more sustained Fed demand may boost markets for mortgage-backed securities.

Mr Dudley said that raising interest rates would give the Fed the flexibility to cut them again if the economy gets into trouble, so it is more important than reducing the MBS portfolio.

“Delaying the end of reinvestment puts the emphasis where it needs to be – getting off the zero lower bound for interest rates,” said Mr Dudley in a speech to the New York Association for Business Economics on Tuesday.

“In my opinion, this is far more important than the consequences of the balance sheet being a little larger for a little longer.”

The Fed is still buying mortgage-backed securities every month as part of its effort to drive down long-term interest rates and support the economy. When someone pays back their mortgage, the Fed reinvests the money in new MBS. Stopping reinvestment would allow its portfolio to decline gradually.

In an upbeat speech on the economy, Mr Dudley signalled he was happy with tapering Fed asset purchases at the current pace of $10bn per meeting, and with current market expectations for a first rise in interest rates in the middle of 2015.

He also discussed how to go about raising interest rates – which requires new tools because the Fed will be doing so with a balance sheet bloated to $4tn.

Comment by RioAmericanInBrasil
2014-05-20 20:41:32

“Why on God’s earth did we ever get ourselves into the business of picking winners and losers in the U.S. economy?”

Because Ronald Reagan and the following Republicans and even some Democrats for 34 years told us that the rich should be the perpetual winners in the US economy. You know, the BS crap about “job creators”. Right.

And then it would “trickle-down” to the rest of us. How’d that work out for anyone here?

This is just recent American economic history folks. There is nothing complex about it. It happened but it failed us.

Comment by MrsLolaSoros
2014-05-20 21:03:08

Since January 1993 Democrats have controlled the Presidency for how many years? 8 under Slickster Bubba and 5+ under the Messiah. Didn’t Bubba have a chance to stop or reverse these trickle down policies?

And how does this square with what we are told were the great times and economic miracles under Bubba?

This 34 years thing you keep trying to peddle doesn’t float. If Bubba was just as big a problem and the Messiah hasn’t gotten anything done either then what is the point to your prattling on about Reagan.

And explain to me the new Mo Credik philosophy being pimped now by your Savior’s administration.

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Comment by chilidoggg
2014-05-20 21:50:42

Since January 1993, the GOP has controlled the House of Representatives for 17+ years. What’s the difference?

Comment by Whac-A-Bubble™
2014-05-20 22:49:49

How do you get from Ronald Reagan, generally a champion of free market economic policies, to government-engineered attempts to deliberately reflate a housing bubble?

That seems like a long stretch.

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Comment by RioAmericanInBrasil
2014-05-20 23:12:26

How do you get from Ronald Reagan, generally a champion of free market economic policies to government-engineered attempts to deliberately reflate a housing bubble?

Complicated but obvious. Let’s look at myth vs reality, and follow the money:

Who did reflating the housing market mostly benefit? The demand (us) or the supply (banks)?

Reagan was not really a “champion of free markets” in practice. That is the myth. “Free markets” consist of a fine balance of labor and capital or how could there be “free markets”? How can there be free markets when capital (supply) has all the perks? Who really got the housing bailout? The supply or the demand? Mostly the supply. Did banks suffer? I think not.

Did the great economic policy pivot our country took in the 80s enhance the “free market” in the long run? Or did it enhance the favored crony-capitalists? Remember, TrickleDown was sold on the notion that it would benefit all of us, not just the rich. We did it. It failed no matter Reagan’s myth.

Free market “champions” do not rig the game to benefit only the rich ie. the supply. A true free market champion would nurture the demand side of the equation as well.

See: Supply Side economics.

Comment by Whac-A-Bubble™
2014-05-20 20:23:05

I suppose they need to keep mortgage rates low or else nobody will be able to buy homes at bubbly price levels?

Comment by Whac-A-Bubble™
2014-05-20 20:25:22

It wasn’t rapid price increases to ridiculously overpriced levels, but rather higher mortgage rates that dragged down U.S. home sales.

1:00 pm ET May 19, 2014
Central Banking
Higher Mortgage Rates Dragged Down U.S. Home Sales: San Francisco Fed
By Ben Leubsdorf

The pronounced slowdown in U.S. home sales in the second half of 2013 was primarily caused by a rise in mortgage rates that made borrowing more expensive for potential home buyers, according to new research from the Federal Reserve Bank of San Francisco.

The U.S. housing recovery has slowed over the last year. Sales of previously owned homes, a key indicator that accounts for the vast majority of home sales, hit a seasonally adjusted annual rate of 5.38 million last July, according to the National Association of Realtors. Existing-home sales have slumped since then, and in March were down 7.5% from a year earlier.

Unusually cold and snowy weather across much of the country took much of the blame this winter, but the housing market hasn’t recovered much with the arrival of spring and the slowdown predated the arrival of harsh winter weather.

But the slowdown did roughly coincide with a spike in mortgage rates that began in May 2013 as the Federal Reserve prepared to begin winding down its bond-buying program. The average interest rate on a 30-year fixed-rate mortgage rose from 3.45% that April to 4.37% in July, according to Freddie Mac, and was 4.2% last week.

“Higher mortgage rates generally have a direct dampening effect on home sales, as buyers face constraints on the size of loans they can secure and on loan payments relative to their incomes,” San Francisco Fed senior economist John Krainer wrote in the paper released Monday. “Since individual incomes likely did not rise over this short period, and house prices continued to grow in most regions, the rise in mortgage rates was expected to have an unambiguous negative impact on sales.”

Mr. Krainer’s analysis concluded a rise in mortgage interest rates is the “primary explanation” for the slowdown in home sales last year, though he added that “unusually severe winter conditions in many parts of the country” may explain why sales continued to fall in the winter when his model predicted they should have recovered.

Comment by Whac-A-Bubble™
2014-05-20 22:53:39

And I guess it goes without saying that the War on Savers will continue indefinitely in order to help home owners achieve ever larger home equity wealth gains?

Comment by RioAmericanInBrasil
2014-05-20 23:19:59

it goes without saying that the War on Savers will continue indefinitely in order to help home owners achieve ever larger home equity wealth gains?

Yes. But not mainly to help the homeowners. It’s to help the banks. (The Supply)

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Comment by goon squad
2014-05-21 16:40:08

Over 20 years old but just as fresh as if it was recorded yesterday 8)

My Bloody Valentine - Loveless:

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