Bits Bucket for July 15, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Feast on your CraterTaters debt-donkeys because that’s all you can afford. Eat up.
Denver Business Journal reports median home price of $285,000 in June, an 8.3% year-over-year increase.
That’s about $185,000 overpriced for these rotting, depreciating shacks.
Meanwhile I realized another $2500 gain in my former company stock this morning. That is over 530% gain for two years of holding those shares.
Building up mucho dinero.
Hundred Dollar Bill,
Keep hoarding….. Cha-ching!
Sincerely,
Another Hoarder
I dunno, my grass-fed chicken and hand-picked black raspberries ($4.69/pound) would disagree with you.
You object to a lot of truths but your objections don’t change that truth Donk.
Donks don’t each chicken. You must be referring to some of your barnyard pals. OK, I promise to come by and throw some crunchy Cheetos in your bag later, but only if you promise to share with the chicken.
BTW, Chickens do not eat grass. You must have caught a duck.
heh… And I’m not familiar with machine picked raspberries. It must be a fantastical machine.
I was gonna say that too about chickens, but I figured she must have meant to say “free-range” chickens. Cause chickens are too smart to buy real estate, so they live for free.
From yesterday. I posted that a paid-off single family residence is a hedge against a market meltdown. A reply:
—————
Comment by Professor Bear
2014-07-14 21:48:16
Actually sfrs are definitely not a hedge against a stock market meltdown as both are risk assets whose values are doomed to tank in lockstep during a serious crash (recent example: Fall 2008). Better hedges are pms and Treasurys.
—————
Did you miss the part about the house being PAID OFF? If you are retired, and the market melts down, how well do you think that crashed market will pay the RENT? But if you have a paid-off house, that is a good chunk of rent that you do NOT have to pay, so the retirement checks go a lot further. So what if the house value drops? It’s still rent that you don’t have to pay. And if you have to, you can move to a low cost state and buy a very cheap house in the sticks and pay very low taxes too. That’s why a PAID OFF house is a hedge against a market meltdown. Actually it’s a hedge against almost anything.
I agree and unfortunately many of this blog just cannot see this fact.
There are issues related to the cost of maintenance and the cost of property taxes, but I would rather lock in the cost of my mortgage/rental for the rest of my life and that is what I’ve done. Plus I have a plan to pay it off in 15 years which is when I will retire.
You “can’t see it” because your wallet depends on you to ignoring the massive losses associated with overpaying by 200%+ for what is always a depreciating asset. A house in this case.
The counter-argument is that if you put the capital that is in your house to work elsewhere over the same time that you paid off the mortgage (recognizing that you need to pay rent along the way, which diminishes how much you put to work), that you would have a large portfolio of diversified (presumably dividend/yield paying investments) that you can use at the same time you have your paid off house.
And if you need to access the capital, it’s instantaneous.
And if you need to downsize in rough times, you’re a renter, so it’s easy.
And you don’t have maintenance costs in the meantime.
Candidly, I think that both strategies have value, but for different reasons.
With the discipline to save, I’m willing to bet that more likely than not, the rent/save strategy leaves you with more capital at the end of the day.
HOWEVER, you may live in a place you don’t really like for a long time to get there and/or move several times MORE than you would if you owned your home.
I think both work just fine for people as long as:
1. If you buy your house, you pay off the mortgage (and NOT keep refinancing);
2. If you rent, you save diligently.
I think both work terribly if:
1. If you buy your house, you never pay off the mortgage, and spend frivolously;
2. If you rent, you also spend frivolously.
Making mortgage debt payments is not “saving”.
I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.
Paying down principal is putting capital into your house. Eventually when you have no debt, the benefit you gain from the house financially is the rent you don’t need to pay.
Interest cost is the cost of renting the money (not saving).
If instead of putting the capital into the house, you put it into other investments, while you don’t get the benefit of not needing to pay rent, you do get the benefit of income from those investments, from which you can use the income to pay rent (Bill’s point).
Note that I did NOT say paying a mortgage was “saving”. I don’t believe that it is. Paying a mortgage is in part renting money, and in part owning a larger and larger piece of the real estate.
Moving more often is not a bad thing. Renters move at their discretion. Homemoaners can’t.
That’s one of the worst things about buying a house- you’re completely immobilized. For commitment-phobes like myself, it’s a terrifying proposition.
That’s one of the worst things about buying a house- you’re completely immobilized.
That is one of the worst things. No doubt about it.
“Homemoaners can’t.”
True during this historic bubble episode, but not always. For instance, if you were lucky enough to buy at the temporary market bottoms in 1985, 1992 or 1996, you could have moved at any time you wanted and sold at a higher price than where you bought. (We did so twice!)
Buy low, sell high.
Corollary: Don’t buy now; wait until prices bottom out.
Excellent post!
is that if you put the capital that is in your house to work
Possibly for sure. I did that for 20 years and came out fine. But in the California market of those decades, that result took a lot more thinking, dodging and doubting than it would have to have just bought and then paid off the mortgage.
But history doesn’t repeat. It just rhymes well most the time.
“…unfortunately many of this blog just cannot see this fact.”
Not all of us who post here are Realtors™.
Or liars. ( not that there is much distinction between a liar and realtor)
Realtors are liars.
Whether its “paid off” or not, when you pay a grossly inflated price(which you did), its still a loss against any actual hedge.
And remember, currently rental rates are a fraction of the monthly cost of buying at current asking prices of resale housing. The only hedge in terms of shelter is in fact renting.
Housing analyst, dear Sir you know nothing about the financials on this house.
How much will you be paying in rent in 10 years? For whatever it’s worth I have locked in my cost for the rest of my life. That gives me peace of mind to know that I’ll be able to retire and live in relative comfort resin living in an RV out the desert.
Well just for interest sake: my rent here Salinas for 8 yrs was $1700 / month plus sewers, street lights, trash,etc. For 8 years that 1200 sq.ft. Abode cost me $163,200 plus the cost of sewers, street lights, trash pick up and gardening service. I was lucky to get something this cheap but it did come with some neighborhood break ins and graffiti.
Salinasron. If I lived in your area I’d move. I can buy for a lot less than you can rent.
This isn’t about me bud…… Its all about you and your grossly inflated cost of shelter. That’s your problem. Don’t make it ours.
Of course, if we ever DO enter a period of deflation, that locked-in monthly cost won’t be so great.
We are in a period of deflation….. with a whole lot of price fixing and bottlenecking of market sectors.
Your house can be PAID OFF, yet its value can drop, along with stocks, at the time of the next big crash.
Diversification gives the option to reallocate away from assets whose value you expect to drop. A paid off house isn’t diversified unless you somehow hedge against a drop in its value.
The idea that spending money on something that will go down in price is a hedge against the value of money going up is ridiculous. Borrowing to do so is absurd.
“…a hedge against the value of money going up is ridiculous.”
Perhaps you hit on something important. So long as the central bankers continue to succeed in their fiat currency devaluation campaign, perhaps real estate and the stock market can go up in tandem forever?
Until it doesn’t.
And Blues point is central to this entire debacle.
Owning real estate can be a hedge, but a hedge of what? Inflation, for one. Rents, while not tied directly to inflation, do tend to rise with the overall trend of rising prices. Absent supply/demand imbalances, property costs like taxes, insurance, maintenance, utilities rise which tend to push a rise in rents. Subsidies, like Section 8 also rise, which also puts pressure on rents to rise.
I’m sure I mentioned this prviously, but the multi I own generates about $3000 in gross rents today. Back in 1974, it was owned by my neighbor and grossed about $500 monthly.
There are other factors, and costs, but the bottom line is yes, real estate can be a hedge. Is it better than the stock market or precious metals? Depends on the timing, government subsidies, interest rates, and liquidity needs, among other things.
A couple of other points: counting on appreciation beyond the implied rental value of a property is pure speculation. I have family that literally made a million in real estate that way. They now own a 25 acre gentleman’s horse farm/estate because of their savy real estate dealings done over the last 25 years, always involving their primary residence. I have not been able to emulate their success and I feel that was a once in a lifetime opprtunity with dropping rate and easy credit at their backs.
Lastly, housing is a form of consumption, and just like cars or jewelry or electronics, some purchase for image, others lifestyle, and yet others need/budget. All are valid reasons for consumption, lets just be honest about the reasons behind our choices. Too often housing consumption gets mixed up with orher excuses for buying/not buying.
Which option is best?
1) Buy a house for $1MM. You get a house, property taxes of about $10k/year, and maintenance expenses.
2) Buy treasuries for $1MM. At today’s rates, you get like $15k/year in income, which is enough to pay rent.
3) Wait for that $1MM house to become a $250k house. Buy it. Use the remaining $750k to buy something like treasuries.
You may not think that #3 is possible, but it happened in Phx a few years ago.
The $15k in interest earned on treasuries isn’t enough to pay the rent on a million dollar property. Not a like/like comparison and it ignores the luxury consumption involved in purchasing million dollar propert vs renting an apartment or house for $1250/mo.
Also, the real question for Phoenix amd other bubble markets is whether that $1million home price was ever justified by fundementals (it wasn’t) or mispriced due to rampant speculation.
Would you speculate in the stock market like that? If not, why would you be willing to do so in real estate, which is less liquid, more capital intensive, just as manipulated and fixed, and possibly more leveraged?
But when is it ever justified? I’ve yet to observe one single sfr that costs more than $275k to build( lot, labor, materials,profit).
Which tends to reinforce the “mispriced” element of the market mentioned above.
No, the $15k/year does not rent you a million dollar house. However, you can get your million dollars back after renting the house for as long as you want. The idea is that the value of the treasuries is more stable than the value of the house.
a paid-off single family residence is a hedge against a market meltdown
I agree, and/or a hedge against a health crisis - or a life crisis. There can’t be many rational arguments against those points. The problem in America, (and elsewhere) is that the cost of a paid-off home is very high in many places. That’s where the math of satisfaction vs opportunity cost gets complicated. But math is math, and life is life.
You report. I’ll decide, for me.
Lola…. What was it this time? A 2 week bender? I hope you didn’t lose your pants again.
Why ‘liberal’ Hollywood hates women
By Katie Pavlich, New York Post
Democrats like to pretend they are the “party of women” while their policies and politicians undermine the claim, argues commentator Katie Pavlich in her new book, “Assault and Flattery.” In this excerpt, Pavlich takes aim at Hollywood, saying that its films and attitudes does more to promote misogyny than any Republican official.
Do you know Samantha Geimer? You should, despite the efforts of the powers-that-be in the $30-billion-a-year film industry. On March 10, 1977, at Jack Nicholson’s house on the tony Mulholland Drive, she became one of liberal Hollywood’s many victims in its war on women.
An encounter one afternoon with renowned film director Roman Polanski would forever scar the 13-year-old Geimer. She arrived to take some modeling pictures, when, according to court records, he plied her with champagne and Quaaludes.
“Toward the end it got a little scary,” she said, “and I realized he had other intentions and I knew I was not where I should be. I just didn’t quite know how to get myself out of there.”
A ratings system known as the Bechdel test takes a look at how women are portrayed in film. In order to pass the test, a film must accomplish three things:
1. It has to have at least two named women in it;
2. Those two named women must talk to each other and;
3. Those two named women must talk to each other about something other than a man.
A majority of major Hollywood films fail the Bechdel test. Most portray women as obsessed with men and their appearance. The not-so-subtle message is that women live frivolous lives outside of their pursuit of sexual satisfaction. “The entire ‘Lord of the Rings’ trilogy, all ‘Star Wars’ movies, ‘The Social Network,’ ‘Pulp Fiction,’ and all but one of the ‘Harry Potter’ movies fail this test,” Swedish art-house movie theater director Ellen Tejle told the Guardian in 2013.
Hollywood has “used” women for years and they’ve also had a hand in making our world more violent, through a multitude of films and programs that promote all kinds of violence. Yet in the coming months we will see who gets painted as waging a war on women. I think we all know who will be accused of this atrocity.
Therefore what we need is Sharia Law, defined by Christian Conservatives. Dress in all black long dresses. Only skin from neck on up showing. Ah, pilgrim style for the new conservative. Osama would weep in appreciation.
Not at all. Just pointing out that it’s shameful how the left allows women to be treated while accusing the Republicans of the same.
Politics and entertainment attract unhealthy people.
Politics and entertainment make people unhealthy.
And how is Hollywood related to the Democrat party exactly? Isn’t Hollywood just an industry? Why do Republicans continue to attempt to make this tenuous connection between Hollywood and the Democrat party? Like “It’s OK for Republicans to do bad things because there are some bad things in Hollywood too, and Hollywood is Democrats”. Makes no sense.
Auntie, you are smarter than that. Unless you’ve been living under a rock, you know that Hollywood promotes, fundraises, and sits at the feet of socialist interests. It’s a knee-jerk given.
Come back into the light and own your credentials in data-driven analysis.
Does it seem like pensions are back on track now due to the rigged market?
Does is seem like someone who is getting 100k in free mortgage assistance is actually causing a real buyer to pay 100k more than he should for a house?
“Does it seem like pensions are back on track now due to the rigged market?”
Pensions are hosed, rigged market or not; The demographic numbers just do not work out.
The actuarial assumptions of 7%+ risk-free investment returns on pension fund assets in a 3% risk-free rate environment just do not work out, either.
Low interest rated actually destroy pensions
Glad you finally agree with me on that point.
This is an old article, but I don’t believe the picture has improved much over the interim.
CFO Journal
Why the Corporate Pension Gap Is Soaring
Companies Struggle as Low Rates, Other Forces Inflate Funding Needs
By Vipal Monga
Updated Feb. 26, 2013 12:12 p.m. ET
Big companies have disclosed yawning pension gaps this earnings season, widening the deficit between what companies expect to owe retirees and what they have on hand to pay them to a near record. Vipal Monga joins Markets Hub. Photo: AP.
When United Parcel Service Inc. UPS +0.81% said last month that it was taking a noncash charge of $3 billion tied to its pension plan, the package-delivery giant blamed what might seem like an unrelated event: the downgrade last summer of several big banks by Moody’s Investors Service.
But the connection between the two incidents illustrates the complexities of calculating pension liabilities—and how little power companies have in keeping them under control.
During the current earnings season, companies including UPS, Boeing Co., Ford Motor Co. and Goodyear Tire & Rubber Co. have disclosed yawning pension-fund deficits, even though they have plowed billions of dollars into their plans and strong stock markets have boosted their investment returns.
Across America’s business landscape, the gap between the amount that companies expect to owe retirees and what they have on hand to pay them was an estimated $347 billion at the end of 2012. That is better than the $386 billion gap recorded at the end of 2011, but the two years represent the worst deficits ever, according to J.P. Morgan Asset Management.
The firm estimates that companies now hold only $81 of every $100 promised to pensioners.
In general, everything happening on the liability side of the pension equation is working against companies. A big source of the problem: persistently low interest rates, set largely by the Federal Reserve.
…
Welcome to Florida, Ben!
Are you winning in the Bizarro Market?
This stock market has to be the ultimate Keynesian beauty contest. Gussy up yer sow and put on some lipstick to enter her as a contestant.
Bulletin Oil drops below $100 a barrel; Brent at 3-month low »
Investor Alert
Outside the Box
July 15, 2014, 6:11 a.m. EDT
In Bizarro Market, stocks rise along with pessimism
Opinion: The evidence of a bubble is there, yet investors keep pushing up equities
By Nat Worden
The Dow Jones Industrial Average closed at 6,437 on that December day in 1996 when Fed Chairman Alan Greenspan coined “irrational exuberance” in describing investor sentiment during the period of dot-com mania.
It was the 1990s. Jobs were plentiful with the unemployment rate at 5.4%. Air travel was dirt cheap and easy, and every Sept. 11 was just another day in a country brimming with peace, prosperity and confidence in the future.
Nowadays, economic hardship is everywhere, and the future seems bleak. The nation is bogged down with intractable foreign military misadventures and under constant threat from a new enemy — “the terrorists.” Class divisions are bitter as social safety nets have grown, taxes have increased on high earners and the federal bailout of the titans of Wall Street remains a bitter pill to swallow for working families now trying to make ends meet.
Instead of feeling irrationally exuberant, most people seem to be rationally pessimistic about their investments, and yet the Dow is somehow gyrating around 17,000, a record. The tech-heavy Nasdaq is up 23% over the past 12 months, with trendy stocks like Facebook and Apple hovering near all-time highs.
Mauldin Economics chairman John Mauldin explains the dangers of the world’s central banks building up excess debt and how technology is upending the global economy. Photo: Getty Images.
Welcome to the Bizarro Market. This stock market reminds me of the great Seinfeld episode called “The Bizarro Jerry” when Jerry describes to Elaine the concept of the “Bizarro World,” an old Superman comic-book reference. The Bizarro World is the mirror opposite of the real world. “Up is down; down is up,” says Jerry. “[Superman] says ‘hello’ when he leaves, ‘goodbye’ when he arrives.”
In the Bizarro Market, investors are actually leaving the stock market, even as stock prices keep recording new highs.
In Bizarro Market, the post-financial-crisis economic recovery is so fragile after half a decade that the Fed is keeping its short-term interest rate target at a record low of near-zero to keep things afloat, even while the stock market roars like it’s 1999.
And in Bizarro Market, the bubble has few cheerleaders. Whatever bullish commentators exist are being drowned out by a constant barrage of media commentating and reportage making the case that stocks are way overvalued.
The notion that the stock market is largely disconnected from the real economy is almost ubiquitous — self-evident even to people who know next to nothing about investing. And it’s hardly contrarian to be out making the case that stocks are in a bubble. A real contrarian in today’s environment would be arguing that the stock market is undervalued and has plenty of room to run. Even stock brokers and financial advisers desperate to lure new clients into stocks can only bring themselves to say that equities are probably fairly valued at best.
And, still, the bull market charges on without even your token 10% correction.
…
July 15, 2014, 8:17 a.m. EDT
Why gold just posted its biggest drop this year
Analysis: And sentiment suggests a low for the yellow metal still lies ahead
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Gold’s $30-plus drop Monday — the biggest daily decline of the year — serves as a powerful reminder that the market for the yellow metal remains vulnerable to shifts in investor mood.
And that does not bode well for gold’s near-term prospects. That’s because there’s more bullishness than bearishness today among the gold traders I monitor, which, in turn, means it’s more likely that shifts in mood will cause gold to fall than to rise.
…
When specuvestors get a big margin call, gold will drop.
“And sentiment suggests a low for the yellow metal still lies ahead”
Well it better take a dive fast because September is usually the month when gold charges upward and finishes the year higher than the beginning of the year.
Because governments around the world have balanced budgets, low deficits and ate no where near bankruptcy????
Because governments around the world have balanced budgets, low deficits and ate no where near bankruptcy????
Maybe the “money” thing is all jive. How could it not be?
A great blog entry about quitting an unsatisfying career at a young age in pursuit of a life worth living. (Just my opinion.) Kind of mean to her former co-workers, though.
——————–
My Life In Law (a short story partially told with comics)
http://www.departurememo.com/
Liberace!
Don’t you agree she’s a pretty good artist, brother?
She paid off her loans and got the F out. It’s inspiring (for millenials). Of course, a Boomer would argue that she’s flushing her Williams/U of Chicago education down the toilet. Silly boomers.
Don’t you agree she’s a pretty good artist, brother?
Yes!
She paid off her loans and got the F out.
And I salute her for that—it is a courageous choice to make.
Now imagine how much better her life might have been if she hadn’t been deeply in debt, and had not had to do something that she did not find fulfilling for a long time?
Was she at your firm, Joe?
I’m going to forward that to my brother, who is also finding his work in law unfulfilling at the moment…
No, I don’t know her personally, but find her inspiring. She was at Debevoise, one of the top 10 large firms in the US. On one hand, she’s a crybaby for complaining about making 200k in her late 20s. On the other hand, if you keep spending all your life to make money, how can you really enjoy it? She’s debt free now and that’s a big key.
As she explains in the comic, her parents played a big role in shaping her choices up until recently. But it’s not just the hours when you are working in biglaw, it’s the catty ways that partners act and the way they expect you to cancel anything else that comes up. It’s almost exactly 6 months since I left that world. I now leave by 6pm on 90% of days. Often around 5. I make the same money, btw. Goal is to stay “in the game” a few yrs as a means to connections and learning tricks of the trade, then get out entirely and do my own thing.
Lawyers are liars.
When I worked in public accounting, I was in an office next to one of the firm’s senior managers, a divorced guy who lost his marriage because he worked in public accounting.
Every day at 5:30pm sharp, he closed his office door and had a 15 minute phone call with his kidz, then back to work until 8, 9, 10pm.
LOLZ to all the young i-bankers, lawyers, accountants who squander their youth on 80 hour work weeks, most of you will never make partner, but keep sacrificing your health, your relationships, your sleep, thinking that you will
My wife is an attorney.
She sacrificed huge hours early in her career (before kids) and got a job in-house at a large company when we started having children. While she still works long hours, she has a lot of flexibility around when and where those hours are put in.
So, she volunteers at school, is able to participate in kids activities outside of school, is home for dinner and bedtime every night, etc.
The challenge is that after the kids go to bed, she often works late into the night/morning.
Is the sacrifice worth it?
I don’t know…time will tell. So far, it has paid off financially for sure. I recognize though that my wife has done a phenomenal job at taking advantage of opportunities that she has come across (your mileage may vary).
Before she left the big firm (perhaps a year or so before she left), she definitely got some partners’ jaws to drop when (in the context of trying to get more support staff to support her massive billable hours) she told them that they couldn’t hold a partnership over her head–because she didn’t care one bit about it. What she wanted was the ability to do her job, and without the support staff, they were hindering her ability to work.
It is definitely much harder today to become a partner at a firm…if that’s your goal, you better have a damn good backup, because that route is much tougher than it was a couple of decades ago.
A family of liayers…..
fraud
Yes they are fraudsters $hitHousePoet. At least the liawyers that frequent the HBB.
more bogus data coming our way tomorrow?
You’re right $hithouse Poet…. I’m sure the lying realtors have some raft of lies ready for release tomorrow.
fraudster
Yes… realtors are fraudsters.
Partnership means a lot less at Biglaw now. First, boomers have instituted a 2 tier partner system at all but the top firms. (And the top firms, like, say Wachtell or Debevoise make only a tiny % of associates partners at some point.)
There’s the equity partners, where the client is considered yours. The best clients will already be taken at your firm and the likelihood of getting a new client for your firm is tiny, esp. bc of conflicts of interest. Like, if you do work for Ford, you probably can’t get GM, unless you limit the lawyer/client relationship to a narrow area. This usually works for us, bc we only handle environmental issues. But the odds of getting a new client are tiny, bc it’s not like the Boomer Rainmakers haven’t already marketed the hell out of all the top execs at the big companies. They fly to their conferences, they give free seminars to the top compliance people, etc.
Then there are the nonequity partners. A lot of firms will make anyone with a pulse a nonequity partner. All that’s required is great stamina for being a drone. If you’re the kind of person who will always do “whatever is needed” with no regard to your family, etc., you can become this type of partner. Compensation in biglaw is usually a “black box” model, meaning it’s pretty opaque. But these guys generally don’t make much more than senior associates, and def under 400k or so, even if they’re a service partner for a big client (think hedge funds or PE). These guys also get shat on by equity partners. They can’t turn down assignments, they can’t pick what associates they’ll be working with, the client doesn’t belong to them, it belongs to the firm generally or to an equity partner/rainmaker.
Your wife was better off going in house for a company. Or going to a smaller firm as of counsel. Much more sustainable in terms of lifestyle. If you can pair that up with being an adjunct prof at a college someday, I think that would be a nice way to live. You can pair something that pays with something that’s enjoyable.
Your wife rocks, RW. But you probably already know that.
My wife is an attorney.
And you’re in RE. You both went after the “money” sort of. Is it good? I’m not judging. It could be good or great for you. But I’ll tell you what. If wealth and income were not so skewed, maybe one of you could have done something more interesting (to you or yours) than RE or Law.
“…who squander their youth on 80 hour work weeks, most of you will never make partner, but keep sacrificing your health, your relationships, your sleep, thinking that you will”
Go consulting for the big bucks for awhile, squirrel away your time and a half and all, then when you get tired of being away from your comfort zone, one year you are going to say “hey I can afford to downsize and stay closer to home!” - which is what I did. Now I have more time for working out, more time for eating better quality food, and I’m not at all social anymore. Exercise, optimal nutrition, and relaxation are far more important than relationships at this age.
“Exercise, optimal nutrition, and relaxation”
the Dead Milkmen - Nutrition:
http://www.youtube.com/watch?v=JMKdovsjjGs&feature=kp
Never heard of ‘em. Catchy!
I have a hard time imagining anybody with musical training forcing themselves to listen to that.
Never heard of ‘em.
?????!?
“hey I can afford to downsize and stay closer to home!”
Except that you are still a couple of states away from “home”…
http://www.mcsweeneys.net/articles/part-one
this is funnier
Great find, cactus. Several people I know are going to love this!
Excellent observations. If you’re going to do a grind, better find one you gives some satisfaction.
Lion Realtors sure do have alot of spare time to troll here these days.
Do you think it might have something to do with the fact housing demand has collapsed to 19 year lows?
No, but I do think that your continual presence here is behind the exodus of Polly, AZ Slim, and ahansen, among others.
You don’t? Think about. Cratering demand in all 50 states due to inflatd prices 2x-5x over construction costs.
What is it you think realtors are doing to keep themselves busy?
wining and dining clients?
Empty pockets and tire kickers?
u have been kicking tires for at lest 6 years dude!
Realtors snowing empty pockets and tire kickers is nothing new.
Dude, you’ve been cheering for debt funded luxury consumption. You may be joking or trolling, but those days are numbered. Put some cash aside, you will need every penny of it.
Im worth every penny. Got equity?
“No, but I do think that your continual presence here is behind the exodus of Polly, AZ Slim, and ahansen, among others.”
Repost this every day if you’ve got the time. You just named three people who I regard as some of the HBB’s best. I believe they are doing the same as I am, checking in on the HBB more out of habit than interest, as this blog has become too fanatically anti-housing. It used to be that buying was good at the right price; now buying is just evil no matter what. The mindless dedication is similar to that of a realtor, only in the opposite direction. I miss what the HBB was.
You’re conflating anti-fraud with anti-buying. And how many of you signed up for a lifetime of losses because you paid a grossly inflated price for a depreciating asset? You made the same error tens of millions of others before you made.
“The right price?” You don’t know what the right price is and you spent a lifetime of labor anyways. You don’t need the HBB. You need a bankruptcy attorney.
‘behind the exodus of Polly, AZ Slim, and ahansen, among others…You just named three people who I regard as some of the HBB’s best… this blog has become too fanatically anti-housing… I miss what the HBB was’
Oh woe is me, I miss the past too, when I could run and jump better. I remember when none of you whining posers “dropped in” to say something negative.
“Oh where’s Polly, where’s ahansen?”
How the f^&%$ do I know or care? Do you think anyone in a year or ten will give a sh$% who was posting here on July 15th 2014? This isn’t some knitting circle of posters. Learn, be ignorant, I don’t care. This is much bigger than who takes time to post here.
This is The Housing Bubble Blog. We are discussing the most important economic event of the last 1,000 years. Get the hell off my blog! And don’t ever use my bandwidth with your sorry presence again you ungrateful bitch.
“We are discussing the most important economic event of the last 1,000 years.”
Thanks for once again grounding the discussion, Ben. And for reminding me why nobody in their right mind would buy a home for their family in California or Beijing, for that matter, in the current market environment.
you ungrateful bitch.
Whoa!
I could swear I remember being chastised years ago by Ben for something much milder than that. Didn’t it used to be a family blog, Ben??
Seems like there might be some history behind that remark…
Republican governor candidate Bob Beauprez “under fire” from LIEberal scamnesty pimps funded by George Soros:
http://blogs.denverpost.com/thespot/2014/07/14/beauprezs-comments-immigration-draw-fire-colorado-latino-leaders-via-liberal-d-c-group/110814/
Bill:
Keep in mind where the reporting on this is coming from - THE VERY LIBERAL Denver (com)Post!!
Political correctness note of the day. A federal judge in MD ordered lawyers to the Redskins as “The Washington Team” and never put the term Redskins into briefs or motions. They’re also not suppose to use the term in the courtroom.
We’re done here as a country.
—————–
http://www.washingtonpost.com/local/federal-judge-takes-stance-against-use-of-redskins-in-court-documents/2014/07/14/23ce1dba-0b5e-11e4-8c9a-923ecc0c7d23_story.html
“A federal judge in Maryland issued a ruling last week that purposely did not contain the team’s name, which has been described as an offensive slur against Native Americans.
U.S. District Judge Peter J. Messitte, who is presiding over a lawsuit that former New York Giants linebacker Barrett Green brought against the Redskins, issued a 21-page ruling with this footnote on the first page:
“Pro Football’s team is popularly known as the Washington ‘Redskins,’ but the Court will refrain from using the team name unless reference is made to a direct quote where the name appears.” Instead, he wrote, the team will be referred to as “the Washington Team.”
The note comes months after Messitte ordered attorneys in the case not to use the team’s name in his courtroom, according to one of the lawyers.”
Closer to home, we have the Syracuse Orange Men.
Here’s an easy one for all you investors out there
Gold is about to get short squeezed and then it will tear on up to greater highs as the weak investors continue to put their money in at the wrong time.
Gold is king
Land is king
The environment you create for yourself and others is king.
Stocks are about to get whomped also
Rocks and shallows ahead captain.
Agreed with all of the above. But cash and T-bills are king too. Not bonds. Not 10 year notes. Maybe 2 year notes at most duration.
Yea, I’m in 30% of all assets in cash right now, but it just doesn’t feel right.
Wait till something big happens, and then I can swoop in.
PBR was an interesting recent play that I missed out on,
but it’s all small potatoes.
6% cash and another 27% in short term bonds (30 month maturities) and intermediate muni bonds (5 year average). I could theoretically move 10% of my net worth fast into stocks and stock funds.
Another 7% in physical precious metals.
A total of 40% out of stocks and stock funds.
6% cash 27% bonds (30 month (5 year average) I could theoretically move 10% of my net worth fast into stocks
That’s all numerical numbers and all.
You’re exactly right SH. Most of your money must be in the safest vehicles possible.
“Most of your money must be in the safest vehicles possible.”
That’s not my style.
No matter what, I intend to be 60% or so in stocks and stock funds out of my net worth. I like to keep a small amount of 5% or 10% for some swooping in of bargains just for fun. But I do have precious metals as insurance. And enough US treasuries/notes/savings bonds/T-bills as another form of insurance and it adds some income.
Within stock funds you can diversify out of the United States. There will be some countries that do not go lock step with the U.S. as it falls into the abyss. The problem is identifying who those countries are. I just throw money into both developed and emerging markets hoping some diversity will protect me.
How can you tell what a bargain is? I have a theory that I should invest in quality merchandise only during a panic when it is distinctly undervalued.
A bargain is subjective. One man’s bargain is another man’s luxury.
With that in mind, choose a percentage of your entire assets in which you would pay for something. That is the limit. No loan involved. For big ticket items, my own rule of thumb is 1/6 of my net worth and no more would be put into a house. Granted there are maintenance costs in the future to add on but your net worth should also increase in time. For a car, I would not spend more than 2% of my net worth. Again in cash. For clothes it’s much less. So much so that I do not price them. For top of the line men’s suits - well I don’t wear them. I’m a software engineer and we wear denim jeans. Many of us engineers dress far cheaper than a lot of lower paid white collar professionals. We look sloppy but that is part of our persona:
http://3.bp.blogspot.com/-plv_mNUvqco/UB1QBObwmiI/AAAAAAAABBY/iVsjZ5uV0b4/s1600/nedry-jurassic-park.jpg
Meet the ultimate Hollywood bubble house:
http://www.redfin.com/CA/Los-Angeles/1577-Viewsite-Dr-90069/home/7119923
In the last 25 years, it’s had 2 owners who made wild profits and 2 owners with losses. Can we say housing bubble lottery ticket?
The sales price highlights -
1989 - $4,000 sold (unusual transaction)
1991 - $453,000 sold
1996 - $285,000 sold
Listed (but not sold) in ‘01, ‘02, and ‘04
2005 - $929,000 sold
Listed (but not sold) in ‘06, ‘08, and ‘10
2012 - $855,000 sold
Listed (but not sold) in ‘13
Listed this week for $1,299,000
A lot of money changing hands since 1989 -
1991- Gain + $449k
1996- Loss - $168k
2005- Gain + $644k
2012- Loss - $74k
2014- (Possible Gain + $444k)
This house is a great illustration of the last 25 years of bubbles - each one pops less and reinflates more than the last.
Anyone else have submissions for ultimate bubble house? We should have a contest.
A good demonstration of the fraud unique to the housing market in CA.
The pain is going to be unbearable for many.
Sisters, OR Housing Prices Collapse 32% YoY As Sellers Panic
http://www.zillow.com/local-info/OR-Sisters-home-value/r_50065/#metric=mt%3D19%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D50065%26el%3D0
A Wall Street trader naively expects the comatose or complicit SEC to actually do its job, and so foolishly shorts a scam stock. His misplaced faith in the integrity of the system cost him a lot more than his job, but at least he has no illusions about the rigged casino markets or what a farce the supposed public watchdogs have become.
http://www.bloomberg.com/news/2014-07-15/cynk-short-squeeze-blamed-by-trader-for-costing-him-job.html
there are jobs at the local casinos available.
Driving on I-95 south from Jupiter to Palm Beach Gardens I saw something this morning that I had never seen before. A Greyhound bus with blacked out windows and Texas plates. Imagine that.
Don’t look now, but that Portugal bank business hasn’t gone away - and appears to be spreading.
http://www.zerohedge.com/news/2014-07-15/portugal-contagion-spreads-espirito-santo-default-portugal-telecom-loan-business-len
Reid: Southern border is secure
By Alexander Bolton - 07/15/14 04:00 PM EDT
Senate Majority Leader Harry Reid (D-Nev.) on Tuesday asserted the southern border is secure despite the massive surge of illegal minors from Central America that has overwhelmed federal agencies.
“The border is secure,” he told reporters after the Senate Democrats’ weekly policy lunch. “[Sen.] Martin Heinrich [(D-N.M.)] talked to the caucus today. He’s a border state senator. He said he can say without any equivocation the border is secure.”
Reid said lawmakers need to worry less about border security and focus instead on President Obama’s $3.7 billion request to help process the tens of thousands of children from Honduras, Guatemala and El Salvador who have been apprehended on the border.
thehill.com/homenews/senate/212328-reid-southern-border-is-secure - 139k -
“The border is secure,” he told reporters [...] He said he can say without any equivocation the border is secure.”
OMG, did he really manage to say that with a straight face???
Reid may be the most skilled liar of all time—I nominate him to be an honorary Realtor(tm)!
Commissar Pelosi and the DNC Politburo won’t be pleased to see their creation, the culmination of decades of offering free shit for votes and importing parasites and criminals to firm up the Democrat supermajority, fragment into more manageable (and in some cases more sane and productive) fiefdoms.
http://www.reuters.com/article/2014/07/15/us-usa-california-breakup-idUSKBN0FK03P20140715
Pat Buchanan says out loud what more and more people are recognizing but refuse to acknowledge.
http://www.wnd.com/2014/07/america-no-longer-1-nation-1-people/
Pat Buchanan says out loud what more and more people are recognizing but refuse to acknowledg
Too many illegals and too much butter is bad?
Take a good look at what Pelosi, McCain, Buffet, et al are really importing.
http://www.borderlandbeat.com/2014/07/11-years-old-she-was-first.html
Buy your California almonds now, or be priced out forever!
http://www.businessinsider.com/californias-drought-cost-state-22-billion-2014-7
The damage has already been done to the orchards since it takes 5 to 7-yrs to husband nut trees to decent production. Fire wood.
I’ve pretty much decided to vote for Elizabeth Warren if she runs. She strikes me as the only candidate who is likely to take on the banksters.
She and Yellen would offer a formidable combination in the number one and two spots in the U.S. power structure.
Warren presses Yellen to get tougher on big banks and their ‘living wills’
July 15, 2014, 1:53 PM ET
Senator Elizabeth Warren, Democrat of Massachusetts, on Tuesday urged Federal Reserve Chairwoman Janet Yellen to get tougher on so-called living wills prepared by the nation’s largest banks.
Under Dodd-Frank, these banks must submit plans on how they can be liquidated in the event of failure.
Warren said that the Fed didn’t seem to be following the Dodd-Frank statute than required a ruling from the central bank on whether the plans were credible.
Warren used J.P. Morgan Chase as an example. The bank has $2.5 trillion in assets, four times the assets of Lehman Brothers when it failed in 2008, and 3,391 subsidiaries, she noted.
J.P. Morgan has filed living wills over the past three years and the Fed has not rejected any of them, Warren said.
“Can you honestly say that J.P. Morgan can be resolved in a rapid and orderly fashion as described in its plans with no threats to the economy and no need for a taxpayer bailout?” Warren asked Yellen.
The Fed chairwoman said she thought the living-will process was meant to be “iterative” and the central bank is working to give the firms “a road-map for where we see obstacles to orderly resolution under the bankruptcy code and to give them an opportunity to address those obstacles.”
“These are extremely complex documents,” with some plans running into tens of thousands of pages, Yellen said.
Warren noted that the Fed has only released 35 pages of information about the J.P. Morgan living will to the public.
She added that the Fed has tools to use if the plans are not credible, including forcing the banks to simplify their structures or forcing them to liquidate some of their assets.
“In other words, break them up,” Warren added.
…
phony scandals