May 29, 2014

Bits Bucket for May 29, 2014

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

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Comment by Housing Analyst
2014-05-29 02:52:13

If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.

“Debt is bondage.”~ Suze Orman, May 11, 2013

Comment by Mr. Banker
2014-05-29 05:17:33

“Debt is bondage.”~ Suze Orman, May 11, 2013″

Debt is bondage for some, freedom for others.

It all depends on which side of the debt you choose to place yourself on.

Comment by Blue Skye
2014-05-29 05:50:01

A banker holding debt that cannot be repaid is a zombie banker.

Comment by Mr. Banker
2014-05-29 05:51:53

Not if he is backed by a rich uncle.

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Comment by MrsLolaSoros
2014-05-29 06:05:24

There are too many banks, especially too many too big to fail banks. We have Coke and Pepsi, Android and Apple, itunes and Amazon, VHS and Betamax, Democrat and Republican, why so many TBTF banks? Two is plenty.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:47:01

Uncle Fed is dead. Long live Auntie Fed!

Comment by Bill, just South of Irvine, CA
2014-05-29 20:45:18

“Uncle Fed is dead. Long live Auntie Fed!”

That would be like Chastity Bono changing to Chas, then back to Chastity.

Would you call that a pro bono?…

Comment by Bill, Just south of Irvine
2014-05-29 07:54:42

Cash is king. Debt is for Donkeys.

Comment by goon squad
2014-05-29 08:06:24

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

You better believe it.

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Comment by Housing Analyst
2014-05-29 08:35:42

“If you have to borrow money for 15 or 30 years, you can’t afford it nor is it affordable.”

You can say that again.

Comment by goon squad
2014-05-29 08:55:03

“You can say that again.”

Please do.

If you want to rationalize your financial suicide in a circle jerk of realtorbabble, try the city-data forums.

If you want the truth, read thehousingbubbleblog.

Comment by Housing Analyst
2014-05-29 10:14:57


“If you have to borrow money for 15 or 30 years, you can’t afford it nor is it affordable.”

Just in case anyone missed it.

2014-05-29 11:56:21

Read this Housing Analyst

Former NFL great Roger Staubach didn’t became wealthy being a renter like yourself.

Roger Staubach is the wealthiest football player worth$600 million dollars.
1. Roger Staubach — $600 Million

What is a Roger Staubach, and why is it worth so much money? A Roger Staubach is a former NFL quarterback (to the shock of absolutely no one) who was good at football, leading the Cowboys to a pair of Super Bowl victories, winning an MVP, and being a six-time Pro Bowler. Staubach, who worked as a real estate broker during the off seasons, because “I was 27 and we had three children,” the mogul told Forbes. “If I got hurt, I knew I had a family to provide for, and it was not crazy money in the NFL then.”

Shortly after his 1979 retirement, Staubach began expanding his real estate company. It grew so large and so successful that Staubach was able to sell the company to Jones Lang Lasalle in 2008 for $640 million dollars. According to Forbes, Staubach had only owned 12 percent of the company when he sold it, having given out equity to his employees as the company grew. So, in addition to being the richest NFL athlete ever, he’s also a pretty nice dude.

Comment by Housing Analyst
2014-05-29 12:02:55

I’d be scared too if I were you IE._Fraud…..

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:49:08

LL King:

There is a big difference between owning an RE company during not a bubble, and buying RE during a bubble. Sort of like the difference between water and a table.

Comment by Blue Skye
2014-05-29 14:35:19

IE “call me King” is no Roger Staubach. Roger, BTW, made his fortune brokering for renters.

Where is Rental Watch and why did he run away yesterday?

Comment by Rental Watch
2014-05-29 18:09:21

I’m here, what did I run away from yesterday?

Oh, I see, the NYC thing…

So, let me say first off that NY is one of the judicial states that has been atrocious about pushing through foreclosures, and is one of the places at biggest risk if they ever sped up the process.

Let’s also say that I’m skeptical of people who say they have a “reliable source” that is only available to them.

And then at the same time, they use another reputable source (the NY Fed) to cherry pick data for their conclusion, while ignoring other data from the same source.

The NY Fed notes a NYC delinquency rate of 14%, with serious delinquencies at about 10%.

Not 30%.

So, why the discrepancy?

He asks the question in his posting, but doesn’t attempt to answer it:

“Here is a question I am asked all the time: How do you know that nearly all of these delinquent properties are still delinquent? Haven’t many of these owners either become current in their mortgage payment, or foreclosed on?

Those are good questions.”

Here is the clue to I think the logical answer from NY’s law:

“The law amends the pre-foreclosure notice provisions of Section 1304 of RPAPL to require that a pre-foreclosure notice be sent, at least 90 days before the lender commences legal action against the borrower, to all borrowers with home loans”

So, if a bank thinks that they may want to foreclose, they need to issue a pre-foreclosure notice at least 90 days before they start legal proceedings.

If they wait to send the pre-foreclosure notice until the borrower is 90 days late, then they can’t start foreclosure proceedings until the borrower is 180 days late.

However, if they send the pre-foreclosure notice after the borrower is 30 days late, then they can start the legal proceedings when the borrower is 120 days late.

In other words, to preserve their legal rights, there is an incentive for lenders to issue these notices as soon as there is a problem.

About 2%-3% of loans in NY transition from being current into being 30+ days late each quarter. A further 1-1.5% transition to 90+ days delinquent each quarter. (from the NY Fed Household Credit report)

Some of the 90+ day delinquent borrowers were 30+ delinquent the prior quarter. However, mathematically, someone can go from current to 90+ days delinquent in one quarter…if they are 20 days late at the end of one quarter, they don’t register, but would be 90+ days late by the end of the next quarter.

In other words, you can’t add the percentages to figure out how many new problem loans there are each quarter, but you need to consider that there is some overlap (probably about a third of the 90+ day loans were considered “current” the prior quarter).

So, new problem loans each quarter are probably about 2-3% (30+) PLUS 1/3 of 1-1.5% (or .3 to .5% additional).

Total new problem loans? Probably from 2.3% on a good quarter, to about 3.5% in a bad quarter.

About 80k loans per quarter were issued “pre-foreclosure” notices in the state of NY from the time the law was changed (about 1.0MM notices over 12 quarters). The loan count in NY is probably closer to 2.5MM (the 1.6MM is a sample from databases that include about 65% of all loans).

That is a bit over 3.2% of all loans each quarter.

This is pretty good evidence that lenders are issuing these notices at the first sign of a missed payment in order to get the 90-day clock ticking ASAP.


So, how many of these notices are issued to people who cure or sell before the foreclosure starts?

The NY Fed has this data as well. Last quarter, they noted 30-60 day late borrowers cured about 35% of the time (which bottomed at about 20% in 2009), and went to 90+ days late about 20% of the time (which peaked at about 45% also in 2009)…which means about 35%-50% of the time over the past many years something else happened (mortgage was paid off via sale or refinance).

So, if these notices are given early, what matters is how many borrowers with the notices simply become more and more delinquent (thus going into foreclosure).

The important number is those loans transitioning from 30-60 days late to 90+ days late, which looks to be 20-45% over time in question…or about a third on average.

So, of the 30% of loans with the notices, 10% really end up being the problem.

Which is the number reported by LPS and the NY Fed.

The guy did the first part of the analysis, but didn’t get to the second part, which ties the data that I see to the data that he presents.

Good data, incomplete analysis.

Comment by Housing Analyst
2014-05-29 18:50:25

Millions of excess, empty and defaulted houses… Collapsing demand.

Your point is?

Comment by Blue Skye
2014-05-29 19:51:46

Hey RW, thanks for the reply. I can see the holes in the article, yet I see the big gapping hole in the Fed data. The Fed is deploying tens of trillions of dollars to hold up the house of cards. Would they do this if everything was peachy? I don’t think so. Yet they “report” peachiness. It’s shadowy. I see enough empty houses and unfinished houses and unkempt occupied houses in my radius to know the official numbers are BS.

The banks are required by NYS law to send out notices, but they are not foreclosing in significant numbers and they are not selling REOs. There is a manure dam holding back defaults. As for me, I am not in the floodplain.

OK, my turn to run away.

Comment by Rental Watch
2014-05-30 10:54:51

Here is what I’m seeing:

Judicial states have a huge amount of shadow inventory…the biggest culprits are FL, NY, NJ–their process is VERY slow to foreclose

Non-judicial states have far less shadow inventory because their process is far faster

Based on what might happen (foreclosures speeding up causing a price crash) I have personally warned people from buying in places with the massive shadow inventory (FL specifically).

However, what might happen (foreclosures speeding up causing a price crash) has not yet happened, and may never happen.

In some places, there is barely any sh*t left behind the manure dam (non-judicial states generally)…in other places, the sh*t is almost overflowing over the top (judicial states, generally).

Comment by Housing Analyst
2014-05-30 17:59:36

Judicial or non-judicial, moratoriums in all 50 states are holding back 25 million excess empty houses.

Comment by Bill, just South of Irvine, CA
2014-05-29 20:50:57

“Cash is king. Debt is for Donkeys.”

But if you got so much cash that you don’t know what to do with it, give it to me.

Or do like I do: Start moving into 2 year notes.

Man, it’s happenin’ “T Bill” Bill is now starting to ladder to get out of the puny 0.09% yield on 52 week bills. The idea is when you have enough emergency cash to use for expenses for two years, you might as well put it in 2 year maturities so that you have an equal amount maturing every 4 or 5 weeks. If you don’t need it to pay off your credit card to maintain zero debt, move it back in for another 2 years. The rich people do that, but with ten year notes.

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Comment by goon squad
2014-05-29 16:12:24

Realtors® are liars

Comment by Whac-A-Bubble™
2014-05-29 03:10:18

7:04 pm HKT
May 26, 2014
Economy & Business
Real Estate Tycoon Sees Titanic Moment for China’s Housing Market
A Chinese national flag flutters at a construction site for a new residence complex in Beijing, in this November 4, 2013 file photo.

China’s once buoyant property market is facing some rough sailing. In fact, according to one tycoon – Soho China Ltd chief Pan Shiyi — the real estate market is looking more like the Titanic headed in the direction of an iceberg.

Mr. Pan, the co-founder and chairman of Soho China Ltd., is taking a very bearish view on the housing market, which has struggled this year. In the first four months of the year, home sales were down 9.9% from the same period a year ago in value terms, official data shows. New construction starts — as calculated by area — were down almost 25% year over year in the same period.

As if that’s not bad enough, demand is also weakening in an expanding number of cities as banks tighten mortgage lending and sales are dampened by widespread expectations of price cuts.

I think China’s property market is like the Titanic and it will soon hit an iceberg in front of it,” Mr. Pan told a financial forum on Friday, according to the China Business News.

After hitting the iceberg, the risks will not only be in the real estate sector. The bigger risk will be in the financial sector,” he added.

He said serious problems lie with financial products like trust and wealth management products, as well as entrusted loans that charge higher interest rates than banks and are key financing vehicles for the property sector.

When housing prices fall 20% to 30%, these problems will be all exposed,” he was quoted as saying.

Soho China declined to comment about Mr. Pan’s remarks. But in a post on his verified Weibo account Monday, Mr. Pan said that during the forum’s question and answer session, he had first asked whether there were any journalists present before replying to a question about the housing market. Only upon being told there were no reporters present, he said, did he proceed to answer.

I didn’t expect there are countless reporters hiding [in the audience],” he said.

Soho has been putting at least some of its money where Mr. Pan’s mouth is – that is, by taking it out of the local property market.

In February, Soho China, run by Mr. Pan and his wife Zhang Xin, announced plans to sell all of their interest in Soho Hailun Plaza and Soho Jing’an Plaza in Shanghai for about 5.23 billion yuan ($853 million) to Financial Street Holdings, a Shenzhen-listed property developer.

Comment by MrsLolaSoros
2014-05-29 05:54:47

China is long term toast over the next 10-20 years. But short term of the next couple of years I think they can lie and manipulate enough to keep it going. How long ago was that 60 Minutes article about Ghost Cities run?

Comment by Albuquerquedan
2014-05-29 07:00:48

China is long term toast over the next 10-20 years.

I agree unless it moves to become more like the U.S. in the latter part of 19th century with both political and economic freedom. If not, the Chinese can increase their private and public debt until they reach our levels and that will take about 10-20 years.

Comment by localandlord
2014-05-29 15:13:33

Interesting that a house HA builds will be depreciated (deteriorated) to zero in less than 15 years.

For a typical house there will be enough principal paid off in 5-10 years of a 15 year loan to cover the maintenace issues that arise.

Even if you can afford a 10 year mortgage you’d probably get a higher interest rate than 15 years. Something to consider.

Comment by Housing Analyst
2014-05-29 15:29:38

So the goal is to substitute losses to interest with losses to depreciation?

No wonder you’re broke and underwater.

Comment by localandlord
2014-05-29 18:40:41

Why yes, I do switch out interest payments for maintenance. Why is that shocking to you?

I currently pay about $680/ mo in interest - and I have 20 renters that help me make that payment. So let’s see - that’s about $32 a month each. Less than your cheeto budget.

And I do budget more than that for maintenance.

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Comment by Housing Analyst
2014-05-29 19:24:19

And cash flow is negative at current asking prices of resale housing.

Comment by Blue Skye
2014-05-29 16:25:00

What is it with these debt junkies? Are they all the same person?

Paying down principle doesn’t pay for one penny of maintenance. They are separate things.

Comment by Housing Analyst
2014-05-29 16:36:50

It’s our little circle of friends from here, there and everywhere.

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Comment by localandlord
2014-05-29 18:14:16

Of course the principal doesn’t go directly to maintenance. But if you need a new furnace or roof in 10 years you can borrow against the house if need be. In 5 additional years the 1st mortgage will be paid for and you can apply that to a 2nd if need be.

I’m not broke by any means and I’m not underwater. I was underwater once on a house in 1983 so i know what that looks like but it’s paid for now and netting each year more than I paid for it.

I’m sorry you have such a pitiful life, HA, that you have to spend the better part of your day looking down on people.

Get in your RV and drive to an area with better recreation opportunities. At least Blue skye has an enjoyable hobby.

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Comment by Housing Analyst
2014-05-29 18:33:37

Borrow against the house to cover the losses because it’s worth less because it depreciated?

And I think you’re taking this much too personal. There are millions of others out there who throw good money after bad on a depreciating house with no hopes of recovering those losses. It just so happens I’m not one of them. Nor am I interested in other depreciating assets like RV’s.

Comment by Blue Skye
2014-05-29 19:34:09

So, you pay down the debt so you can borrow against the equity to cover depreciation…

Kind of like perpetual motion. That might work as long as the universe is accelerating.

My hobby is art. The boating is more of an addiction.

Comment by Whac-A-Bubble™
2014-05-29 03:11:38

Has there ever been another point in history when so many people expected to get rich simply by owning a home?

Comment by Combotechie
2014-05-29 04:56:40

Yeah, about ten years ago.

Comment by MrsLolaSoros
2014-05-29 05:48:02

I agree with Combo, last time was worse. The mania was broader. This time it isn’t your average shoeshine joe blow thinking they’ll get rich. It is a much more crooked or foolish type.

Comment by Whac-A-Bubble™
2014-05-29 03:22:19

Are you placing a high degree of faith in the “complacency index”?

Comment by Whac-A-Bubble™
2014-05-29 03:24:24

May 28, 2014, 3:00 p.m. EDT
Get ready for a major market move
By John Nyaradi

As VIX, the CBOE S&P 500 Volatility Index, plumbs new lows, many market observers are preparing for a major market move.

Many investors rely on the Chicago Board Options Exchange Volatility Index to keep an eye on stock-market volatility. As the VIX continues to sink closer to its historic low of 9.39, many commentators are now discussing the VIX as a “complacency index.” As the VIX falls, it signals increasing levels of investor complacency. Because economist Hyman Minsky taught us that periods of high volatility follow periods of low volatility, many investors are beginning to worry that a “Minsky moment” could be lurking around the next corner that would send volatility higher, increase the risk premium for holding stocks and cause prices to sink.

On Friday, May 23, the VIX ended the session at the day’s low of 11.36. The increased focus on investor complacency, which followed the highly publicized interview with hedge-fund manager David Tepper, has not reduced investor complacency.

In fact, the opposite has taken place, despite Tepper’s statement that: “I am nervous. I think it’s nervous time.” Although the S&P 500 climbed 0.42% to a record-high close on Friday at 1,900.53, the trading volume was thin — at a pre-holiday level of 1.419 billion S&P 500 shares. Unfortunately, the S&P trading volume has not been much better on the other days when it has advanced. Furthermore, a review of the S&P chart will reveal that Friday’s advance was the third point of a triple-top, which included April 2 and May 13.

Comment by azdude
2014-05-29 05:16:14

the stock market has been climbing wall of worry for like 6 years. why will it change now? What is the catalyst?

Comment by Whac-A-Bubble™
2014-05-29 06:48:35

John Nyaradi sez so…

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Comment by MrsLolaSoros
2014-05-29 06:00:39

They are hard at work now manipulating the job numbers for May and the Q2 GDP numbers and Q1 revisions to make it look like things are fine so that the November election is not a disaster. Everything is focused on November. Everything.

A lie in the service of the statists is not a lie. By any means necessary … Hold on to that POWER.

Comment by Combotechie
2014-05-29 06:07:50

“A lie in the service of the statists is not a lie. By any means necessary … Hold on to that POWER.”

Do it for the children.

If the statists won’t look after the children then who will?

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Comment by MrsLolaSoros
2014-05-29 06:37:08

20 million illegal aliens?

Comment by Rental Watch
2014-05-29 10:58:26

I’ve generally been of the opinion that there won’t be a public market crash because there was a lot of cash on the sidelines buying on dips, and a lot of worried pundits talking about the next crash (we haven’t had the massive enthusiasm). My belief is that there won’t be another crash until there are far fewer public calls for a stock market crash (thus increasing complacency, and lots more money comes off the sidelines and moves into the market). There is still a lot of cash out there that would move the market if it joined the party.

In any event, just recently, there have been two respected pundits who have come out more bullish (or at least less “doomsdayish”).

Gartman just started singing a different song. This from a CNBC yesterday:

“Having called for a correction, I have been abundantly wrong,” Gartman said. A correction is typically defined as a market downturn of 10 percent or more. “I am probably going to be wrong continuing to expect one. It’s best to err on the side of remaining quietly bullish,” he said.

Jeremy Grantham’s Q1 newsletter basically said that he thinks there is a greater than 50% chance the S&P goes over 2,250 over the next 12-18 months…but then, watch the hell out…

From his letter:

“…I believe it probably (i.e., over 50%) will not end for at least a year or two and probably not before it reaches a level in excess of 2,250 on the S&P 500.”

AND (before you think I’m in the “it never rains” club), his parting comment:

“I am not saying that this time is different (attention Edward Chancellor). I am sure it will end badly. But given this regime of the Federal Reserve and given the levels of excess at other market peaks, I think it would be different to end this bull market just yet.”

The steady drumbeat of “crash callers” may be quieting/slowing down enough to get the blow-off the top move up, followed by another crash.

Watch this space…the next 12-24 months could be a bigtime roller coaster in public markets.

Comment by Housing Analyst
2014-05-29 12:04:22

More junk.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:42:57

My cash feels bad about stocks.

Comment by oxide
2014-05-29 03:35:33

Today’s HBB banner ads:

Playtex diaper genie, #1 selling diaper disposal system. (Millions of moms can’t be wrong.”)


Birchbox, “a monthly grooming delivery selected just for you.” With an image of a well-styled man who would look like Trayvon’s uncle and the subheadlines: “Open for Dapper. Join today. $20/month. ”

I guess I’ve confused the heck out of google. And what must the NSA think of me??

Comment by Housing Analyst
2014-05-29 05:28:05

Have you calculated the yearly cost of depreciation on your shanty yet?

Comment by Blue Skye
2014-05-29 05:55:03

Google is your daily horoscope. Got the nest but no little oxlings? Get a pet!

Comment by Housing Analyst
2014-05-29 05:56:42

She is the pet! lolz

Comment by MrsLolaSoros
2014-05-29 06:07:14

I think Lola is all of our pets. I feel like that toothless hillbilly who owns the ugliest dog in the world.

Comment by Housing Analyst
2014-05-29 06:19:49

You rode Lola pretty hard yesterday.

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Comment by MrsLolaSoros
2014-05-29 06:44:10

I only got in about 3 zingers. I think she has me on ignore. Adan schooled her good. Wednesday is loony Lola day I guess.

Comment by Albuquerquedan
2014-05-29 06:57:01

I think Lola is loony everyday. Colorado helped feed “her” delusions that she was in Brazil which did make things worse. Watched Al Jazeera this morning and while the facilities may be largely constructed just before the games including wet paint, access to the facilities through roads and public transportation will probably not be. Should be fun to watch not the “football” but a socialist government fail miserably for the world to see and learn. Of course, unlike Lola I will not claim to be from Brazil because I watched a news story.

Comment by Elanor
2014-05-29 09:19:20

Adan, or any of you losers, “schooled” anyone? LOL (without an ‘A’)! You guys live in a dream world. :D

Comment by Albuquerquedan
2014-05-29 10:55:22

Lola, you need to pay Ben for all the screen names you are using.

Comment by Housing Analyst
2014-05-29 11:39:27

That’s right E-Lola.

Comment by Elanor
2014-05-29 13:23:14

Wrong again. Loosers. ;)

Comment by Housing Analyst
2014-05-29 14:43:47

Get your purse out E-Lola.

Comment by oxide
2014-05-29 06:27:23

Sorry, I don’t need any little oxlings or pets. If I really wanted oxlings I could have had them 15 years ago. There are two new introverted pooties next door and one very extroverted pootie across the street.

Comment by oxide
2014-05-29 07:11:41

For the heck of it, I looked up birchbox. Good god. Send us money and a beauty profile, and we send you little samples (and sell your profil info too). This is millenial entreprenuership at its finest? :roll: Who is buying into all this crap? Ugly mistresses?

Comment by MrsLolaSoros
2014-05-29 06:02:13

I think Google has achieved sentience. It knows much more than you think.

Comment by jose canusi
2014-05-29 06:15:25

Google as Fat Elvis. My favorite analysis.

“Maybe when Google dies on the toilet while trying to squeeze out a worthwhile software program, we will be nostalgic for the way they once were. Maybe we’ll use Google impersonators for searching. In the meanwhile, here, have some Quaaludes, guys.”

Comment by aNYCdj
2014-05-29 09:24:05

A REAL DJ knows who the 3 Elvis’s are…..

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Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:16:13

Most of my ads are just a regurgitation of something that I already purchased. Sometimes, the store in question will try to pair up a recent purchase with a suggestion.

For instance, I recently bought a pair of red ballerina flats. Now I get ads from Nordstrom, displaying the red flats next to an image of a model wearing a dress that has red in it.

They were doing better when they were displaying oodles of sandals on the top and side banners, but it’s a gamble for them. How do they know if I care more about sandals than dresses? And will I actually buy something because I saw an ad, right after I already got done shopping there?

I read somewhere that research has already shown that internet ads don’t work, but everyone still wants to buy them, so whatever.

Comment by Arizona Slim
2014-05-29 13:06:57

Most of my ads are just a regurgitation of something that I already purchased. Sometimes, the store in question will try to pair up a recent purchase with a suggestion.

Same here. And I’m not into making duplicate purchases.

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Comment by goon squad
2014-05-29 08:09:13

even without kidz, you’ll still need that diaper genie because you’ll be p00ping your pants when the reality of your incalculable losses starts to sink in :)

Comment by In Colorado
2014-05-29 18:17:11

Worse things could happen, like having bombs rain from the sky. And people survived that, including a few relatives.

Comment by Housing Analyst
2014-05-29 06:37:40

All the nail biting and teeth chattering on Bloomberg over crateringrevised Q1 GDP is a gas. They’re getting honest though. It’s not “the weather” anymore. They’re facing the music and discussing cratering demand for all things, the housing debacle, etc.

Price(of anything) never seems to enter the discussion and when it is approached, the conversation immediately changes to “inflation”. And then once in a blue moon, say once a week, an honest person comes on and drops the truth bomb about deflation or the fact that housing is a complete farce like Dan Alpert did yesterday.

Comment by Whac-A-Bubble™
2014-05-29 06:52:32

GDP is down but the S&P500 just hit a new record high, so it’s all good, really.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:39:25


2014-05-29 12:00:48

Former NFL great Roger Staubach didn’t became wealthy being a renter.

Roger Staubach is the wealthiest football player worth$600 million dollars.

1. Roger Staubach — $600 Million

What is a Roger Staubach, and why is it worth so much money? A Roger Staubach is a former NFL quarterback (to the shock of absolutely no one) who was good at football, leading the Cowboys to a pair of Super Bowl victories, winning an MVP, and being a six-time Pro Bowler. Staubach, who worked as a real estate broker during the off seasons, because “I was 27 and we had three children,” the mogul told Forbes. “If I got hurt, I knew I had a family to provide for, and it was not crazy money in the NFL then.”

Shortly after his 1979 retirement, Staubach began expanding his real estate company. It grew so large and so successful that Staubach was able to sell the company to Jones Lang Lasalle in 2008 for $640 million dollars. According to Forbes, Staubach had only owned 12 percent of the company when he sold it, having given out equity to his employees as the company grew. So, in addition to being the richest NFL athlete ever, he’s also a pretty nice dude.

Comment by goon squad
2014-05-29 13:20:53

This message sponsored by the National Association of Realtors®

Comment by MrsLolaSoros
2014-05-29 06:41:58

I would like to apologize to Auntie Fed for calling her a liar yesterday. I don’t know what got into me. I think I thought it was one of our regular shills.

She was mistaken about ultra low inventory from a sales perspective. As for the low SFH rental inventory, there is a huge supply of apartments. Discounts everywhere.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:38:11

The inventory of SFH rentals seems to be low in Phx right now.

Comment by Albuquerquedan
2014-05-29 06:48:04

We have GDP down 1% while the price of Brent oil is above $110 per barrel. A real recovery is impossible with high energy prices. It is as simple as that but Obama’s foreign and domestic policies have made energy more expensive not less expensive. Just events in Libya have taken more than one million barrels of oil out of production. Saudi Arabia’s oil field are tired and well past peak and cannot make up for supply disruptions. Any increase in the pace of economy will cause the price of oil to soar since the amount of oil being displaced by electric cars etc. is insignificant. However, Obama just does not get it and his EPA is actively pursuing policies to make electricity more expensive slowing the economy even more.

Comment by Albuquerquedan
2014-05-29 07:13:11

From Wikipedia this is what a real recovery looks like:

According to a 1996 study by William A. Niskanen and Stephen Moore,[37] on 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years. Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.

Comment by MightyMike
2014-05-29 16:58:43

Does that name Niskanen ring a bell at all, Dan? He was a member of Reagan’s Council of Economic Advisers. So he wrote a paper claiming that policies that the helped devise led to wonderful things. What a surprise.

Comment by Albuquerquedan
2014-05-29 07:33:31

BTW, this story explains that the shale oil play is far from widely profitable. There is very little room for any drop in oil prices unless we open up Alaska and the coasts to drilling:

Comment by rms
2014-05-29 11:51:51

Bookmarked for tonight. Thanks!

Comment by Blue Skye
Comment by Albuquerquedan
2014-05-29 08:03:07

You do realize that we are not the only game in town and what is happening is Asia with ever increasing car numbers is an order of magnitude more important than the fact that driving in the U.S. has plateaued?

Comment by Albuquerquedan
2014-05-29 08:09:22

We are talking about 1.6 million car sales per month. They are a bigger market for cars than the U.S. and most of their sales are not replacement sales like the U.S.

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Comment by Cactus
2014-05-29 08:42:58

You do realize that we are not the only game in town”

Anyone trying to by a house in Silicon Valley knows this

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Comment by Albuquerquedan
2014-05-29 08:51:28

Speaking of numbers media trying to put a “good” spin on very soft numbers:

Comment by Bill, Just south of Irvine
2014-05-29 07:27:23

U.S. Economy Shrinks for the first time since 2011

The patient is still bedridden, weak, and flatulent. Zero interest rates forever!

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 12:09:25

Who cares? As long as the stock market is up (puke), then all is well.

Comment by Whac-A-Bubble™
2014-05-29 07:33:48

How are your bond investments doing in this ultra-low interest rate environment?

Comment by Whac-A-Bubble™
2014-05-29 07:37:08

Awash in Liquidity, Part I: Why Interest Rates Are Falling
By Robert Barone
May 27, 2014 1:03 pm
And why, in the short-term, increased market volatility will result.

Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession. This has confounded many macroeconomists. In this first installment of a two-part series, I will discuss why interest rates are now falling, and why, in the short-term, increased market volatility will result. In the second installment, I discuss the implications of the Fed’s future use of non-traditional and unproven policy tools with which it is experimenting, and how existing policies have exacerbated the income gap.

Falling Interest Rates

At the beginning of 2014, the US 10-year Treasury yield was 3.0%. As I write this in late May, they are near 2.5%, a huge move in any man’s bond market. There are several reasons for this, all of them revolving around policy and central bank activities.

Evolving Fed Policy: The Janet Yellen Fed has now made it clear that interest rates will stay low for a longer period of time than the markets had anticipated, especially after her initial faux pas in suggesting a six-month time frame for rates to rise after the taper had ended. Markets adjust to this kind of anticipation rather rapidly. Furthermore, this Fed appears to be interjecting social issues into its policies, especially having to do with the unemployment rate. The latest is some policy sensitivity to “disadvantaged” workers (the long-term unemployed, and those working part-time for economic reasons). If the issue is structural (e.g., lack of employable skills), then monetary policy is powerless to help, and relying on these indicators as proof of slack in the labor market may result in a monetary policy that does more harm than good. There is also an unconfirmed rumor in the blogosphere involving former Fed chair Ben Bernanke. Most of the time, such rumors aren’t worth talking about, but this one is quite interesting. In a private meeting, the former chair is rumored to have said that the Fed funds rate is unlikely to reach its 4% long-term “neutral” state in his lifetime. Mr. Bernanke is 60 years old, so the implication is that rates will remain abnormally low for at least the next 20-25 years. Let’s take such rumored remarks with a grain of salt — this is the same person who assured us that the sub-prime meltdown had been “contained.”

The Fed’s Backroom Operations: In March, one of the world’s major holders of US Treasury securities dumped $100 billion onto the markets (Russia is the usual suspect). One would expect interest rates to rise to accommodate such a large and sudden increase in supply; but there was none. Strangely, the central bank of Belgium ended up with $100 billion of such securities on its balance sheet. That particular central bank cannot print money, as it is part of the European Union ( EU) where only the European Central Bank (ECB) can print. So, it had to borrow funds to buy such bonds. No banker in his/her right mind would do this without a guarantee; so it is rumored that the Fed made a low- or no-interest rate loan. In effect, this then became a no-brainer: a matched term where the borrower pays 0% but gets 2.5% in return. (The losers are the US taxpayers to the tune of about $2.5 billion per year.) This transaction also created 100 billion of new dollars (which occurs whenever the Fed increases the assets (loans) on its balance sheet). If this is anywhere near the truth, along with its regular QE program, the Fed created about $150 billion of new money in March, which the markets have had to absorb. In addition, the US federal deficit is shrinking, so even with tapering, the Fed is still purchasing the lion’s share of newly issued US Treasury debt, thus limiting supply to a market that is clearly awash in liquidity.

Comment by Bill, Just south of Irvine
2014-05-29 07:43:59

My municipal bonds are doing just dandy!

To Da Moon!

Comment by Cactus
2014-05-29 09:12:39

No banker in his/her right mind would do this without a guarantee; so it is rumored that the Fed made a low- or no-interest rate loan. In effect, this then became a no-brainer: a matched term where the borrower pays 0% but gets 2.5% in return. (The losers are the US taxpayers to the tune of about $2.5 billion per year.) ”

Just great the working guy will have to pay for this in higher taxes lower services.

Comment by Whac-A-Bubble™
2014-05-29 07:41:34

Awash in Liquidity, Part 2: The Long-Term Consequences of Falling Interest Rates
By Robert Barone
May 28, 2014 9:30 am
There are going to be unintended effects that we can’t yet discern, but there are some issues that we already know about.

In the first installment of this two-part series (Awash in Liquidity, Part I: Why Interest Rates Are Falling), I discussed how the world has come to be knee-deep in liquidity. As a consequence, interest rates, as seen through US 10-year Treasury yields, have surprised most pundits. Since the start of 2014, rates have fallen significantly with the 10-year falling from 3.00% to 2.50% (as of late May). There are clearly going to be unintended consequences that we can’t yet discern, but there are some issues that we already know about.

Tool-less Fed

The first concern is that, over the last five years, the Fed has destroyed the tools it has used for the last 100 years to carry out monetary policy. Reserves in the banking system are now 34 times the level that is “required.” So, raising reserve requirements doesn’t appear to be viable. Selling assets from its balance sheet (open market operations) to reduce reserves would require an undoing of about $2.6 trillion before bank reserves would become an effective tool to control bank lending or the growth of the money supply. And, the Fed as the “lender of last resort” simply doesn’t make sense in a world awash in liquidity.

The creation of the Fed in 1913 was in answer to the need for there to be a liquidity provider or lender of last resort after several severe financial panics culminating in the Panic of 1907. The Fed was created in 1913 to be available to liquefy eligible collateral during periods of financial stress, and, of course, the Fed would charge those banks an interest rate (the “discount rate”) for doing so. And, in the financial crisis of 2009, the Fed did exactly this, by liquefying bank assets (taking them as collateral against a loan or line of credit) that no other private party would buy. In today’s world, because the Fed has created more than $2.6 trillion over the past five years, it would be hard to fathom the need for more liquidity. Money is cheap, and clearly almost any large institution can get it, even those with junk ratings. (Note, however, that regulatory considerations have limited small businesses and consumers access to this pool of money through traditional banking channels — perhaps partially explaining the sub-par economic recovery.)

Experimental Tools

So, how does the Fed unwind all of this? How does it actually raise interest rates when the appropriate time comes? Today, it doesn’t appear that the Fed actually knows exactly what it is going to do, nor can it model, with any precision, what the impacts will be of some new tools with which it is currently experimenting.

Here are two such non-traditional experimental tools: 1) The Fed now pays .25% on bank reserves. If it thought that the economy was heating up and wanted to discourage bank lending, it would have to raise the rate it pays on such reserves. 2) A variant of this has the Fed entering the “reverse repo” market with non-bank financial institutions, like hedge funds or money market funds. Through reverse repos, the Fed gives one of these funds collateral from its swollen balance sheet in exchange for some of the cash that this non-banks fund holds. At the end of the contract period, the trade is reversed. The Fed gets back its collateral, and the hedge fund or money fund gets back its cash plus interest (i.e., the hedge or money fund has become the “lender”).

Think about this! Both the payment of interest on bank reserves and the payment of interest to the money or hedge fund is just the opposite of what the original Fed legislation of 100 years ago contemplated. Instead of the market paying the Fed interest for the Fed to provide liquidity, the Fed is now paying interest to the market in order to reduce the tons of liquidity the Fed created over the past five years. One thing is for sure: There are bound to be unintended consequences of the use of the experimental tools.

Comment by Blue Skye
2014-05-29 07:49:24

“unintended consequences”

So, the theft is unintended?

Comment by Albuquerquedan
2014-05-29 08:32:43

No, but the people figuring out the theft is unintended.

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Comment by Housing Analyst
2014-05-29 10:50:56

What strikes me most about these economy destroying Frauderal Reserve efforts to “crush cash” is that the more they try, the more smart people move to cash. The outcome is the exact opposite, however they’ve exacerbated the problem by creating many more debtors.

Strange world.

Comment by Whac-A-Bubble™
2014-05-29 07:44:32

Up and Down Wall Street
What’s Wrong with This Picture?
Plunging bond yields, depressed VIX and record stock indexes don’t fit—until you factor in the Fed.
By Randall W. Forsyth
May 29, 2014 7:24 a.m. ET

Two aspects of the current investment landscape have befuddled the best and brightest this year: the steady decline in bond yields and the collapse of volatility. Could the two be opposite sides of the same coin?

Amid much head-scratching, the yield of the benchmark 10-year U.S. Treasury note fell to 2.43%, down 60 basis point (0.6 percentage point) from year-end and the lowest since June 2013. Meanwhile, the VIX — the CBOE Volatility Index on Standard & Poor’s 500 index options — was in the very subdued, mid-11 range.

The proverbial visitor from Mars would be puzzled. Virtually every economist and strategist thought bond yields had nowhere to go but up given improving employment and inflation lifting off the floor. Meanwhile, the VIX — the so-called fear gauge — ought to be higher given concerns from geopolitics (Ukraine) to the global economy (sputtering U.S. growth, European deflation, Abenomics not delivering in Japan, and concerns over China’s property bubble.)

But the Martian would be wrong, or only partially. There is indeed a world of worry. And that would suggest some insurance would be worthwhile. But what sort of insurance?

Options are insurance policies; even the terminology is the same. You pay a premium on a contract that pays off should a certain event occur, whether a security rises above or falls below a set price, or an accident takes place. The higher the risk of that happening, the higher the premium paid.

Investors evidently are unwilling to pay up for protection from options. After all, if nothing bad happens, the cost of the option is lost. Similarly, the cost of flood insurance is lost if there is a drought. So, if the forecast is for no rain, the price of this option falls.

Moreover, options are a wasting asset; that is, they run only for a specified span of time. If they don’t pay off before expiration, they wind up worthless.

Government bonds, meanwhile, provide a sort of protection against losses on other, riskier assets. If calamity strikes, bonds rise in price, which offsets the decline in stocks and higher-risk bonds. But there’s a key difference.

Time takes a toll on options prices; they inevitably approach zero if they don’t move into the money, that is, have an economic value.

Bonds have a longer life, up to 30 years for Treasuries. And if held to maturity, they end up paying their face value of par, or 100 cents on the dollar.

The terminology here again is telling. Options expire while bonds mature.

So, which has been the better hedge against uncertainty? If worse doesn’t come to worse, options, which protect against losses on risk assets, go to zero. Bonds, for whatever reason, have been an appreciating asset.

Which would you rather own for protection? What goes down in price — put options? Or what goes up — Treasury securities?

The economic rationale for the relentless bid for Treasuries is ambiguous, at best, given the signals from other markets.

The S&P 500 ended Wednesday just a hair below the record set the previous day. The Dow Jones Industrial Average also hovers near its record while the economically sensitive Dow Transportation Average set another new mark Wednesday. Rising prices for Treasury securities seem out of sync with strong Dow Transports.

How to make sense of it? Hypotheses proliferate, from U.S. bonds’ following the descent in yields abroad, including those of obligations of governments in the European periphery whose creditworthiness is derived from their being part of the Eurozone. Concerns about EU elections in which populists decisively turned thumbs down to a united Europe seem to have evaporated. The notion that Spain offers just 35 basis points for 10-year bonds over the U.S. Treasury beggars credulity.

There is another aspect, that the Fed will continue to buy bonds. In this week’s Barron’s interview, MacroMavens’ Stephanie Pomboy contends the U.S. central bank will be forced to relent and “taper the taper;” that is reverse course and stop slowing its purchases of Treasury and agency mortgage-backed securities.

Bureaucrats hate to have to admit to an error and flip-flop. But the Fed may have found a way to keep buying bonds without admitting it. And only a bond geek would get the gambit.

In a speech last week, New York Fed President William Dudley suggested the central bank should continue to reinvest interest and principal payments even after the Fed started to lift its short-term policy rate target. Currently that’s the federal funds rate, the interest banks charge each other for overnight loans.

But with some $3 trillion in excess bank reserves sloshing around, the fed funds rate has lost its relevance. The Fed will more likely raise short-term rates by boosting what it pays on excess reserves and through its reverse-repurchase-agreements. The latter basically is a facility through which banks and other institutions park money at the Fed, where it’s effectively out of circulation, and thus tightens money-market conditions.

In the old days, the Fed could accomplish the same thing simply by selling some of its securities, which would drain liquidity from the banking system. The Fed would rather use tools that would (in theory) raise short-term interest rates while causing the minimum disruption to the bond market.

Letting one’s imagination run wild, one can see a scenario in which the Fed would rather not sell bonds and shrink its assets to effect a monetary tightening. There is a cost, however. Paying 1% on $3 trillion in excess would cost the Fed $30 billion. In past cycles, the Fed never had to pay anything on its liabilities.

How to make that up? By maintaining a big balance sheet, which would help to generate interest income. One way to keep it growing is to continue to reinvest interest and principal payments.

Comment by Salinasron
2014-05-29 08:55:54

WAC, off your topic but since you live in SD I have a question for you. I have a friend going that way to fish this Sunday. Out of mission bay, Seaforth. He was told about a ‘rock and roll festival and blocked streets. Is there an easy access route?

Comment by Cactus
2014-05-29 08:31:47

Captain obvious here

Larry Fink runs BlackRock (BLK), the world’s largest money manager, so when he shares the concerns he’s hearing from his customers, it’s worth paying attention.

Lately, he’s hearing worries about the impact of technology on job growth, especially in the developing world. From agriculture to manufacturing, industries are becoming increasingly productive by relying more heavily on machines and other technological innovations. And that in turn is displacing workers and holding down wages.

“In the United States, we’ve been living with technology transforming the workforce, and most of developed countries have been living with a transformational technology (of) the workforce for many years,” Fink said on Wednesday at the Deutsche Bank Global Financial Services conference. “But what is going on in the developing world that we don’t spend enough time (focusing) on: technology’s now gutting jobs just as fast in the developing world.”

Fink speaks with world leaders from China to Europe and across Asia and Africa and they are voicing fears that these changes, and the increasing economic inequity that results, could end violently.

Comment by Bill, just south of Irvine
2014-05-29 09:27:59

But if wages are to low to buy the widgets that are created through higher productivity, the prices of those widgets, in a free market, will have to fall to meet wages.

Comment by Housing Analyst
2014-05-29 10:04:26

Bill gets it.

Comment by Cactus
2014-05-29 12:59:49


They try and sell Widgets through financing which borrows from the future and sets us up for deflation.

FED tries to keep it going with ultra low interest rates.

Comment by Bill, just south of Irvine
2014-05-29 16:39:01

Imagine if around 1982 the Fed supported PC and Apple prices where you could only get a government loan to buy them. We would have hardly had a tech revolution.

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Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 11:48:26

Technology increases efficiency, which makes the product cheaper.

Comment by tresho
2014-05-29 08:52:25

NM: Intel production slump could mean more job cuts
– There are new fears that jobs at a big metro employer could be in jeopardy.

Wednesday an Intel official said the Rio Rancho plant has lost out on a big project and if they don’t land another one, production may slow down.

Intel has already cut hundreds of jobs over the past year. And Wednesday’s news comes at a time when HP, another big employer in Rio Rancho, could also be on the verge of more job cuts.

Rio Rancho and the state of New Mexico gave HP massive incentives in return it had to keep a certain number of employees on staff.

That hasn’t happened, so HP has had to pay up.

The same goes for Intel.

Sandoval County Commissioner Orlando Lucero says for years Intel has had to pay the county for not keeping its promised level of employment.
Comments posted on the site are interesting:
dadandteacher– “Rumours abound that that Intel plant will completely close in 5-7 years anyways. Intel and HP shutting down would set Rio Rancho back 15 years financially.”
JohnDoe2000 • 15 hours ago– “Rio Rancho wouldn’t exist without the land scam they started as or the jobs provided by the arrogant and short-sighted Intel Corp.”
NM Expatriot: “NM is famous for its ghost towns. Seems to be an omen for the state. Soon we will have another testimony to corporate corruption as a huge fab sitting empty. The metal thieves are planning the copper wire stripping of the century. I can envision semi trucks carting away thousands of tons of copper to be shipped to China where it’s needed. The only jobs in NM now are burglary, car theft, bank robbery, prostitution, and drug trafficking. And people ask me why I am in Arizona now?”

Comment by Albuquerquedan
Comment by aNYCdj
2014-05-29 10:05:36

Those pesky environmentalists sure cause more damage then they are worth. blocking the Alaskan pipeline for years, gave OPEC its power

Blocking cutting down old growth trees in CA when Pacific lumber aka Maxxam had the legal right to do so for over 100 years bankrupting the company putting 10,000+ people with high paying jobs out of work…

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 11:46:22

I could have sworn that most places had restrictions on diesel fuel.

Comment by In Colorado
2014-05-29 18:13:17

I think about half of all cars in Europe are diesels. Given that that they pollute more than gasoline powered cars that does seem like a bad idea.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 10:03:56

Greetings, and crater!

NPR is back to talking about real estate every single morning again. How is this a national news story that needs to be repeated every day when I am trying to wake up? Someone is paying that station to cheer-lead the market. This morning, it was declared that 9%/year is a SUSTAINABLE “growth rate”, and very healthy. This is in contrast to the 30% that happened last year, which was not sustainable, but was a recovery.

This is a thinly veiled attempt to trick people into thinking that they should expect RE to appreciate 9%/yr.

Comment by Arizona Slim
2014-05-29 10:40:44

When it comes to returns of any sort, anything over 5% is gravy. And unlikely to be sustained for very long.

Comment by MightyMike
2014-05-29 11:20:43

How is this a national news story that needs to be repeated every day when I am trying to wake up?

Doesn’t the anger induced help you to wake up?

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 11:44:30

I like it better when there are nice things in the morning.

Comment by Neuromance
2014-05-29 11:21:33

Real estate in this country truly is a cartel. Fannie Mae just created a streamlined system to handle short sales. The catch? To use it - to even register on the site - one has to be a licensed real estate agent. Granted, on the site it states it’s for listing agents and clients considering a short sale. But the fact that one has to have to be a licensed UHS to even view the functionality - truly a taxpayer-financed cartel.

WASHINGTON, DC – Fannie Mae (FNMA/OTC) today announced the expansion of the HomePath® for Short Sales website, a communication tool created to help real estate professionals efficiently complete short sales and resolve challenges directly with Fannie Mae. The new functionality will allow agents to contact Fannie Mae sooner in the short sale process and preempt potential challenges, decreasing the need to escalate concerns further down the road. The website is open to any real estate professional working on a short sale involving a Fannie Mae-owned loan.

Comment by Rental Watch
2014-05-29 16:22:51

This kind of BS isn’t limited to the GSEs.

HUD (a taxpayer supported enterprise) entered into an agreement with the USPS (another taxpayer supported enterprise) to get detailed information about addresses where mail isn’t collected…as a proxy for where there are vacant housing units.

My understanding is that they have, by zip code, the percentage of addresses where mail isn’t collected.

IMHO, this would be pretty useful information.

The catch…if you are a taxpayer, you can’t see the data.

However, if you are a non-profit (ie. you don’t pay taxes), you can get access to the data.

Comment by "Auntie Fed, why won't you love ME?"
2014-05-29 11:50:01

So, did everyone watch the 13 hr live streaming video of Arby’s smoking a brisket yesterday?

Comment by Housing Analyst
2014-05-29 11:58:46


Comment by tresho
2014-05-29 13:01:25

Detroit spends $8.7 million to flip 30 homes that bring in $2 million

City officials spent as much as $537,000 per home renovating 30 houses under a federal program to fight blight only to sell most for less than $100,000 apiece, a Detroit News investigation has found.

The Detroit Land Bank transformed eyesores — some that were rotting and burned — into gleaming gems, with glass-tiled bathrooms, stainless steel appliances, underground sprinkler systems and even $35,000 geothermal heating in a few. The goal was to entice middle-class families into East English Village and Boston Edison to strengthen the neighborhoods.

But as the land bank works to sell the last three homes in the program that began in 2011, even some buyers say the costs are outrageous for a bankrupt city. Susan Hanafee was shocked to learn from The Detroit News that $430,000 was spent on the three-story Boston Edison home she bought last year for $80,000.

“It kind of makes me sick,” she said. “It didn’t really need that much rehab. … It makes me sad to think about the money that was poured into a particular house and … to know my neighbors are having to scrape enough together to put a new roof on.”

In total, the land bank spent nearly $8.7 million from the U.S. Department of Housing and Urban Development on 30 homes. That’s an average of $290,000 per home, and the 13 most expensive homes cost $300,000 to $537,000 apiece. The return on the investment from sales so far: $2 million.
“We have found other ways to waste public funds are now moving in a different direction,” said Richard Wiener, the land bank executive director who took over Jan. 27.
Contractors said it was easy for costs to escalate. Often, the worst homes on the block were selected. Some needed expensive foundation repairs, lead and asbestos abatement and new plumbing and electrical systems. And many homes, especially in Boston Edison, are just big, adding to costs for roofing and other materials.
Costs escalate when other people’s money is being spent quickly with lead paint remediation requirements, energy-efficient mandates and historic preservation rules, said Tom Goddeeris, executive director of the Grandmont Rosedale Development Corp.

“It is a lot more expensive to renovate houses than people think,” Goddeeris said.
The land bank spent nearly $187,000 to buy and fix a home on Edison Street in the Boston Edison neighborhood before officials ditched the project last year because the foundation crumbled.
The Michigan State Housing Development Authority said the spending decisions belong to the Detroit land bank.

“We elected not to object because of the historic and cultural significance of the Boston Edison and (East English Village) neighborhoods,” wrote Katie Bach, a spokeswoman for MHSDA in an email.

“Had the DLBA not intervened, it’s almost certain that the Detroit real estate market would have collapsed further without that infusion of NSP dollars.”

Former land bank board member Tahirih Ziegler said the program was necessary because the money was there real estate prices were depressed.

Comment by Arizona Slim
2014-05-29 13:08:05

Second derivative going negative in Tucson! Man the lifeboats!

Home Price Appreciation Declining in Tucson Area, Report Says

Comment by Blue Skye
2014-05-29 14:13:19

If the 1st derivative goes negative, I hope you have an escape algorithm!

Comment by Arizona Slim
2014-05-29 16:01:01

Coding it now, Blue Skye…

Comment by rms
2014-05-29 17:31:29

“Second derivative going negative in Tucson!”

Hehe, that inflection point is a fother mucker. Rather than blaming high prices for depreciated shacks in chit neighborhoods the MSM blames the weather. We need “mo credik” to get the flim-flam buyers back in the game. Man-up, ‘Merica!

Comment by Muggy
2014-05-29 17:28:33


Over 100 Billion Served.

Comment by AbsoluteBeginner
2014-05-29 18:51:28

I guess there is no need to worry about the year 2525:

Comment by Blue Skye
2014-05-29 19:20:08

Please add 2 billion years to that. According to astronomers.

Those guys sure blew the prediction of a spectacular shooting star display a week ago.

Comment by AbsoluteBeginner
2014-05-29 19:07:26
Comment by I Love Amy
2014-05-29 20:36:35

Amy used to work as a mortician before she began to work as a realtor.

One time a man who’d just died was delivered to Amy’s mortuary wearing an expensive, expertly tailored black suit.

Amy, asked the deceased’s wife how she would like the body dressed. Amy pointed out that the man did look good in the black suit he was already wearing.

The widow, however, said that she always thought her husband looked his best in blue, and that she wanted him in a blue suit. She gave Amy a blank check and said, ‘I don’t care what it costs, but please have my husband in a blue suit for the viewing.’

The woman returned the next day for the wake. To her delight, she found her husband dressed in a gorgeous blue suit with a subtle chalk stripe; the suit fit him perfectly…

She said to Amy, ‘Whatever this cost, I’m very satisfied.. You did an excellent job and I’m very grateful. How much did you spend?’
To her astonishment, Amy presented her with the blank check.

‘There’s no charge,’ said Amy.

‘No, really, I must compensate you for the cost of that exquisite blue suit!’ she says.

‘Honestly, ma’am,’ said Amy, ‘it cost nothing. You see, a deceased gentleman of about your husband’s size was brought in shortly after you left yesterday, and he was wearing an attractive blue suit. I asked his wife if she minded him going to his grave wearing a black suit instead, and she said it made no difference as long as he looked nice.’

‘So I just switched the heads.’

Comment by rms
2014-05-29 23:05:22


Comment by The Weather Guy
Comment by Whac-A-Bubble™
2014-05-29 20:44:45

Has The Next Recession Already Begun For America’s Middle Class?
by Michael Snyder • May 28, 2014

Has the next major economic downturn already started? The way that you would answer that question would probably depend on where you live. If you live in New York City, or the suburbs of Washington D.C., or you work for one of the big tech firms in the San Francisco area, you would probably respond to such a question by saying of course not. In those areas, the economy is doing great and prices for high end homes are still booming. But in most of the rest of the nation, evidence continues to mount that the next recession has already begun for the poor and the middle class. As you will read about below, major retailers had an absolutely dreadful start to 2014 and home sales are declining just as they did back in 2007 before the last financial crisis. Meanwhile, the U.S. economy continues to lose more good jobs and 20 percent of all U.S. families do not have a single member that is employed at this point. 2014 is turning out to be eerily similar to 2007 in so many ways, but most people are not paying attention.

During the first quarter of 2014, earnings by major U.S. retailers missed estimates by the biggest margin in 13 years. The “retail apocalypse” continues to escalate, and the biggest reason for this is the fact that middle class consumers in the U.S. are tapped out. And this is not just happening to a few retailers - this is something that is happening across the board.

Comment by Combotechie
2014-05-29 20:54:24

Money velocity seems to be, uh, slanting down just a wee bit …

Comment by rms
2014-05-29 23:17:55

They’re just using gravity to gain some speed before they pull-up. Pretty soon we’ll be climbing again like a homesick angel. Everyone will be dancing in the street, and credik will runneth like manna from heaven.

Comment by Combotechie
2014-05-29 21:01:16

A bunch of economists assembled on a beach and decided to apply their economic logic and expertise towards solving a problem as to what to do with a very large and very rotten whale carcass …

Comment by Prime_Is_Contained
2014-05-29 22:49:37

Does anyone else think it interesting that the bond market is telegraphic fear precisely when the stock market is showing none at all?

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