Bits Bucket for September 13, 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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Rowland Heights, CA Housing Prices Crater 10% YoY; Inventory Surges 53% On Collapsing Demand
http://www.movoto.com/rowland-heights-ca/market-trends/
Institutional investors are “instituting” big price cuts because they see that a market relying on regular buyers is going nowhere but down.
New home builders are in full retreat mode offering all kinds of free upgrades and bonuses as prices plummet, just like last time.
The smaller flippers late to the game are getting crushed.
Are J Fraud and the like dumping their crapshack portfolios?
http://www.marketwatch.com/story/7-things-that-are-wrong-with-your-house-2014-09-08
You’re a Debt Donkey.
Keep paying your landlord’s mortgage, renter for life!
Why pay a bank double the monthly rental rate?
Get a real job, honey. Dumb and selling used homes is no way to go through life.
Do it for the children.
Renters (in large complexes ownned by apartment REITS) tend to be much more honest than home moaners. Maintenance guy who just fixed my leaking air conditioner in Phoenix has been working and renting at these same apartments as long as I have. Very nice guy. When the staff live at the same complex they make sure it is a great place. You live next door to a home moaner and that person might have missed his mortgage payments the last five years.
This is even more leverage for buyers to drive down the prices. Thanks Amy!
“Housing’s ‘Shadow Inventory’ Still Haunts Banks”
http://news.yahoo.com/housings-shadow-inventory-still-haunts-banks-152949909.html
Oak Park, CA Housing Prices Crumble 10% YoY
http://www.movoto.com/oak-park-ca/market-trends/
Oh my word…
Salem, OR Housing Prices Crumble 5% YoY; Inventory Skyrockets 32%
http://www.movoto.com/salem-or/market-trends/
Realtor Charged With Internet Stalking Of Child
http://thecabin.net/news/local/2014-09-10/fcso-arrests-hot-springs-man-stalking-minor
California: Housing Price Cuts Point To Shift
http://www.latimes.com/business/realestate/la-fi-home-prices-20140912-story.html
Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.
Yep. Now would be a very opportune time to dump your overpriced crapbox on a bag holder/debt donkey.
Is it time to get levered up again by borrowing a bunch of currency to buy stocks and homes? The timing feels right.
Never been a better time to buy.
+1 All in.
I found this to be an interesting article written by Joel Kotkin on the newgeography (dot) com website:
Baby Boomtowns
Virtually all the metro areas where there has been the strongest growth in families from 2000 to 2013 are highly suburban, highly affordable and located in the South and Intermountain West. If they also have a strong economy, like top-ranked Raleigh, N.C., they are even more attractive. In concert with strong net in-migration, the number of children in the Raleigh metro area between the ages of 5 and 14 grew by 63,600 from 2000-13, or 55.7%. That’s roughly 10 times the national growth rate of 0.5% for this demographic.
The same combination of affordable housing and economic growth has helped No. 2 Austin, Texas, where there were 86,200 more children in 2013 than in 2000, growth of 49.3%, as well as No. 4 Charlotte, N.C. (+82,100, 32.9%).
Several of the high-ranked metro areas on our list are housing bubble hot spots that experienced rapid population growth in the first half of the last decade but then stalled out in the Recession. No. 3 Las Vegas posted 35% growth among 5 to 14 year olds from 2000 to 2010. Since 2010 its child population has expanded at a modest 2.3% rate. A similar pattern can be observed in No. 5 Phoenix.
Link:
www dot newgeography dot com/content/004519-baby-boomtowns-the-us-cities-attracting-the-most-families
So the birth rate is going up in urban ghettos.
Interesting.
The DNC’s FSA needs new entitlement recruits.
Yeah, Austin is one big ghetto.
Whats the birthrate doing in rural ghettos?
Gold is already dropping on the mere realization the Fed will eventually normalize interest rates. Any thoughts on how far down it has to go from here?
Dollar Gains on Fed as Gold Drops While Asian Stocks Fall
12 September, 2014 GMT
The dollar headed for its biggest weekly gain versus major peers since November and precious metals retreated as investors assessed the U.S.-rates outlook before the Federal Reserve meets next week. Most Asian stocks slipped with gold after Chinese lending data as wheat dropped.
The dollar climbed 0.1 percent by 12:28 p.m. in Tokyo, with the yen at an almost six-year low versus the greenback. Gold retreated 0.5 percent, heading for its biggest weekly drop since May, and silver plunged 0.9 percent. The MSCI Asia Pacific Index (MXAP) lost 0.3 percent, set for its longest losing streak in four years. Standard & Poor’s 500 Index futures were little changed. Wheat was near its lowest price since 2010.
Dollar Rally
The U.S. currency has rallied the last four weeks as U.S. economic reports spurred speculation the Fed will raise interest rates sooner than previously estimated. China’s aggregate financing and money-supply growth missed estimates, while 702.5 billion yuan ($114.5 billion) of new loans were extended in August, close to the 700 billion estimate of economists. Reports on industrial production and retail sales are due tomorrow. Euro-area industrial output is also due, as the latest round of sanctions against Russia take effect.
…
Nope…interest rates going to zoom up means long bonds will be a hot potato. Stocks too. Where will investors put the money when they dump their bonds and stocks? Cash only?
Both gold and (existing) long-term bonds will tank.
Again, when interest rates tanked from 1980 to 2000, gold tanked. Because people loaded up on treasuries and gold smelled bad. In the late 70s when rates skyrocketed, so did gold.
I presented evidence of charts in a few posts. Wheat precedents in graphs can you show me where gold fell when rates climbed and where gold went up when rates fell? I want both 52 month bills and ten year notes in the graphs you provide.
“Again, when interest rates tanked from 1980 to 2000, gold tanked.”
Totally different transition then from a period of high inflation to the death thereof through high interest rates.
It’s different this time (REALLY!).
I don’t know about you, but CDs and inflation-protected bond funds would be my choices.
Silver, not gold, would be the other. More readily fungible.
Quarter oz and tenth oz gold are fungible. A tenth oz buys you a family of four game night at Angel’s Stadium, with trash food For all and beer for the adults.
Does China pose deflationary risk? Or would any China deflation be contained, just as yen deflation was to Japan (1990-2014)?
Economy
China Inflation Softens to Four-Month Low
Food Prices Lead Drop in Consumer-Price Index; Some Economists Warn of Deflationary Risk
Updated Sept. 11, 2014 7:44 a.m. ET
A woman sells cabbages at a market in Shijiazhuang, in China’s Hebei province. Food prices were mostly responsible for lower consumer-price inflation. Zuma Press
BEIJING—China’s economy showed new signs of sluggish domestic demand on Thursday, as August consumer inflation unexpectedly fell to a four-month low and some economists warned of the potential for deflationary pressure if pricing weakens further.
Food prices, which can be volatile and subject to seasonal trends, were mostly responsible for the drop. But some economists said pricing power looks weak excluding the food measure.
The figures “show that China’s deflation pressure is definitely rising,” said ANZ economist Liu Ligang. “Domestic demand is very weak, and monetary policy is slightly tight.”
…
Copper prices slip
AAP
September 12, 2014 8:09AM
COPPER prices slipped Thursday after Chinese inflation data came in weaker than expected, prompting concerns about demand in the world’s largest consumer of the metal.
THE most actively traded December contract fell 1.8 cents, or 0.6 per cent, to $3.0925 a pound, its lowest settlement since August 19 on the Comex division of the New York Mercantile Exchange.
The market turned negative early in the session after the release of the China data and never recovered, posting its third losing session of the past four.
…
Gold Bullion at 8-Month Low on “Weak” Demand as China “Gains Pricing Power” with New Contracts & Trading Exchange
Thursday, 9/11/2014 14:53
GOLD BULLION prices rallied $7 per ounce Thursday lunchtime in London after hitting an 8-month low beneath $1240.
Earlier touching 3-week and 1-month lows respectively, the bounce for gold bullion priced in Euros or Sterling was more muted, as the Dollar weakened following a surprise jump in weekly US jobless claims data.
Silver meantime touched its lowest Dollar level since end-June 2013 at $18.66 per ounce, barely 40¢ above its lowest price in more than 5 years.
Major government bond yields eased back as prices rose, but Europe’s key Brent crude oil contract again held below $100 per barrel – a record high when first reached in early 2008 – after new data from China showed a marked slowdown in consumer-price inflation.
Money-supply growth in China, the world’s second-largest single economy, also slowed in August, falling to a 5-month low of 12.8% per year.
Global food prices last month hit their lowest level since September 2010, according to a United Nations’ index of 55 goods – down 3.6% from July.
“We have had disappointing growth data and the Dollar is very strong,” Bloomberg quotes Barclays’ analyst Kevin Norrish.
“Growth now looks a bit less promising and supplies in many commodities are quite robust.”
…
September 8, 2014, 5:09 A.M. ET
China’s Trade Surplus Hit Record From Falling Iron Ore, Oil Prices
By Shuli Ren
Agence France-Presse/Getty Images
China’s trade surplus hit another record high in August, registering $49.8 billion, ahead of the $40 billion expected by analysts.
Much of the surprise came from the imports. Exports grew 9.4% from a year ago, largely in line with the 9% expected by the street. But imports fell 2.4% from a year ago, a lot weaker than the 3% growth analysts had expected.
Falling commodity prices was the key contributing factor to the fall, said Bank of America Merrill Lynch analysts Ting Lu and Sylvia Sheng:
In volume terms, growth of iron ore imports dropped to 8.5% yoy in August from 12.8% in July, while that of copper and crude oil imports improved to -12.3% and 17.5% yoy, respectively in August from -16.5% and -9.0% in July.
Price of iron ore declined further in September. Last week, ore with 62% content fell 1.7% to $83.8 per tonne, the lowest level since September 2009.
…
Local school districts are finally starting to wise up and ditch Michelle Obama’s nanny-state bureaucratic meddling in their school lunch programs.
http://eagnews.org/minnesota-school-ditches-michelle-os-lunch-rules/
To the mindless McCain Mutants who would have elevated phony “conservative,” Wall Street fluffer, and fame-whore Sarah Palin to the national political stage: you must be so proud.
http://www.theguardian.com/world/2014/sep/12/sarah-palin-family-alaska-brawl-reports
Someone should make a show about the Palins. It could be called “The Wasilla Hillbillies”
Somebody should make a show about the cretins who voted for McCain/Palin. It could be called “Idiots who shouldn’t vote or breed.”
With all due respect, I think most people were voting against a radical marxist man child who promised to fundamentally transform the united states of america. The people who should not vote or breed are the vapid mouth breathers that fall for corny jingles like “hope and change”.
I concede the point. Obama Zombies are also too stupid to vote or breed.
I wrote in Ron Paul in 2008. He was my alternative to the fascist Obama.
I did the same. And again in 2012. And will vote for the most attractive 3rd party candidate in 2016 rather than throw away my vote on the Republicrat duopoly’s Hollow Man candidates.
Someone should make a reality show about the Obamas.
It would be called “The Flauntleroys”.
WOT?
Biggest capital flight from the UK since Lehman over fears of Scottish succession. And then there’s the “Russian” oligarchs yanking their money out of London real estate. This could get interesting.
http://www.independent.co.uk/news/uk/scottish-independence/scottish-independence-17-bn-reportedly-drained-from-uk-economy-as-secession-fears-grow-9731081.html
Regardless of how Scots vote next week, the genie is out of the bottle in terms of popular disaffection with an arrogant, out-of-touch UK political class that is little more than an adjunct for the City of London oligarchs and robber barons.
http://www.telegraph.co.uk/finance/economics/11093587/Investors-pull-17bn-from-UK-as-banks-ratchet-up-Scottish-independence-pressure.html
So, when does California say “screw you” to Sacramento and split in two? Or four?
Don’t throw stones at glass houses. London is far from being the only home of today’s oligarchs and robber barons.
More strategic context for the implications of Scotland going its own way. The implications for the globalists of disaffected populations taking their destiny into their own hands are profound - no wonder the plutocrats are moving their “investments” out of the affected regions.
http://www.informationdissemination.net/2014/09/the-strategic-fallout-from-scottish.html
Beginning of European and greater Global Chaos
Beyond a loss of stability and economic fortune in the British Isles, Scottish independence could be the harbinger of further European national chaos. Other disaffected global minorities with state ambitions are watching the outcome of events in the United Kingdom with growing interest. Spain, which has significant populations of Basques, Catalans and Andalusians faces regular calls for greater self government and even independence from these nationalities. Belgium has seen significant tensions between its Walloon and Flemish peoples that have threatened to break up that nation. French-speaking citizens of Quebec have regularly agitated for independence. All of these groups, as well as others could be emboldened by the break-up of the British state.
The present world security situation can ill-afford a Europe distracted by internal divisions. The aggressive Russian state led by Vladimir Putin has used national conflicts in Georgia, the Caucuses, and now the Ukraine to break down potential pro-Western states on its borders. Scotland is not adjacent to Russia, but festering national crisis in otherwise stable nations could be exploited by unfriendly nationals and non-state actors to further their own non-democratic goals.
With only days to go before Scots vote on independence, nationalists are warning banks and multinationals that they might pay a price for their opposition to a “yes” vote. This has got to be very disquieting for City of London investors who will have to reckon with a changed political landscape and polarization regardless of how the vote shakes out.
http://news.yahoo.com/scottish-independence-battle-draws-day-reckoning-warning-business-112326208–sector.html
“This referendum is about power, and when we get a ‘Yes’ majority we will use that power for a day of reckoning with BP and the banks,” Sillars, a nationalist rival of Salmond’s, was quoted by Scottish media as saying.
“BP, in an independent Scotland, will need to learn the meaning of nationalization, in part or in whole, as it has in other countries who h
Pundit says that despite the latest polls, Scots will vote “yes” for independence - and places the blame squarely on malgovernance by successive Labor and Tory (i.e. City of London bankster-controlled) administrations. This would send a tidal wave of instability through global markets.
http://www.businessinsider.com/why-scotlands-voting-yes-2014-9
Thus are the lines drawn: on the No side, you have the hated Westminster elite, who have done a bad job governing the UK and a particularly bad job governing Scotland over the past 35 years. Many of them are Scottish themselves, which only really makes things worse. Meanwhile, the Yes side is young and angry and betrayed and proud and, most importantly, really Scottish: they live Scotland every day, and they want self-determination. They want to run themselves, to make their own decisions, rather than chafing under the rule of Londoners (of whatever nationality) who spend much more time thinking about Brussels or Berlin or Washington than they do about Glasgow or Aberdeen.
‘The decline in commodity prices comes with “at least nominally deflationary moves,” and that has to be tremendously frustrating to the central banks, veteran trader Art Cashin said Friday.’
“They’re shoveling money at the markets like crazy and prices are not only not going up, in many cases they’re going down. That’s got to keep them awake at night,” Cashin, director of floor operations at UBS, said in an interview.’
Think about this statement. When did it take hold that central bankers control the price of everything? How freaking insane is that? And shoveling cash? Are there no poor people in the world? No bridges that need fixing? No pension unfunded? They’re shoveling cash to keep prices higher?
Get a rope.
^Best Quote and Post Of 2014^
Higher prices = recovery
Higher prices result in collapsing demand.
No, the unemployed or people seriously concerned about their bleak economic prospects scale back and don’t take on long-term financial commitments.
No you’ve got that backwards. Recovery=higher prices.
A true recovery would result in some higher prices due to increased real demand. An artificial price reflation is… well… an artificial price reflation, nothing more.
+ 1000
And shoveling cash? Are there no poor people in the world? No bridges that need fixing? No pension unfunded? They’re shoveling cash to keep prices higher ??
Well sure there are Ben…Which, allows us to dig down a bit and ask the question why are they doing this ?? Although, the benefit does accrue to a large degree to the big players, I think they are very afraid deflationary spiral will take hold…
The fact that they are that concerned, afraid you might say, that should make us all pause….
I think about this a lot, what the PTB controlling oligarchs are doing and why. Certainly they want to make sure they don’t lose theirs and that they make more so they want to keep up the pumping. If that stops working, look for another crisis, war, emergency, whatever to allow further extraordinary measures.
But I take the point that in a way they are also looking out for everyone because if this sucker goes down it is going to be very, very ugly. We could not handle another depression, breadlines, 25 percent unemployment, etc.
“We could not handle another depression, breadlines, 25 percent unemployment, etc.”
Take a closer look.
Ten+ million have left the workforce in the past few years. These are not officially unemployed because they are not eligible for any type of benefits. What percentage of working age people are not working? What percentage have gone from full time to lower paying part time jobs?
Ever shop at the grocery store and the person in front checks out with something that looks like government issued ID/credit card, then pays cash for the last few items? The invisible breadline, 40 million strong.
What do you think a depression looks like if not this?
Yet the price of food and fuel has doubled because of the investment bankers and the Fed.
Are you on crack? Invisible breadline? Puhleez. No one is waiting in line half a day for bread. And we don’t have 25 percent unemployment. Nowhere close.
I agree with some of the sentiment behind what you are saying but your statement “what do you think a depression looks like if not this?” shows how foolish and spoiled people are today.
A depression is starving kids and empty bellies. Mamas cryin tears for cryin hungry babies with no milk. Desperate people willing to do near anything to make a buck to feed their families. If you think this is where we are at today, Imdont know what to say.
The mere fact that you are posting to a blog on the internet pretty much shows we ain’t in no depression. Not even close.
No one is waiting in line half a day for bread.
So it’s the time wasted standing in _line_ that defines a bread-line?
Sure, today we only have 40M on EBT cards, and the lines are brief as folks rush the registers at midnight; we are may more efficient. But the need is similar.
And we don’t have 25 percent unemployment.
Have you looked at ShadowStats lately? 22-ish, sure, that’s a little better than 25.
A depression is starving kids and empty bellies.
You assume that a depression will look identical across wildly different technological back-drops. That’s absurd.
The mere fact that you are posting to a blog on the internet pretty much shows we ain’t in no depression. Not even close.
LOL, that’s the icing on the cake. We couldn’t possibly have a depression as long as we can post on a blog on the internet!
We couldn’t possibly have a depression as long as you can cheaply send a telegram all the way across the country! Do you see how ridiculous that sounds?
Oh, waiting half a day, that’s the measure is it? Not that 40 million can’t feed the kids without the dole. Not that it has taken tens of trillions of debt just to keep the veneer up?
LOL, I was born at the tail end of the Great Depression and I know that it’s not all babies crying for milk. My grampa had a radio, which cost more then than my laptop costs today, so that’s not it either.
which cost more then than my laptop costs today
You just outed yourself as a behind the times geezer. The truly cool and up to date use a tablet, preferably an overpriced iPad.
https://www.youtube.com/watch?v=98LeLZ2crZE
Tyler Durden to the angry young men reduced to cogs by globalism: Our great depression is our lives.
“The truly cool…”
Well thanks for trying to catch me up, fruitless though that may be.
You people take the cake. In the depression people were starving. Living in squalid conditions with no electricity. Sick and unable to afford a doctor. There were NO jobs to be had for those willing to work at any level. If you want to define modern society that can feed and shelter millions on the dole in relative comfort with free health care cable tv, computers and smart phones as a depression then you need to google some of the images from back then.
I take the point about globalism, outsourcing jobs, fake stats, and all that. I am not towing a Bush line. Although I tend conservative, I am honest enough to realize they are all crooks. But there are jobs for those willing to work, maybe not the best in all cases, but there is a path to marketable skills for those willing to work hard.
If productivity has increased so much that we can feed and care for people without their needing to work, that is a different conversation, but it ain’t a depression.
We couldn’t possibly have a depression as long as you can cheaply send a telegram all the way across the country!
You don’t get it, even the poor have iPads and computers and smartphones now. They also have plenty of food. The poor weren’t sending telegrams during the depressions, much less sending them every hour of every day while eating pop tarts. An egg, a single egg, was a treat.
In the depression people were starving. Living in squalid conditions with no electricity. Sick and unable to afford a doctor. There were NO jobs to be had for those willing to work at any level.
You are confusing the symptom with the disease.
And you really need to read up some on the GD-I. 75% of people were gainfully employed during it. Many of them felt guilty because they were _not_ suffering as others were—survivors guilt, essentially.
So by your definition, because we have a social safety net now, we can never experience a depression, since it won’t look the same as the Great Depression?
Yes, if large groups of people are not wondering where their next meal is coming from or how they will pay for a doctor or medicine for their babies then it is not a depression.
Economically troubling times need to be troubling to a large segment of the population. That means basic necessities. Economic imbalances and structural problems that prevent some people from attaining what they want are not a depression.
“And we don’t have 25 percent unemployment.”
Modesto, CA is about 16%, and that’s on the good side of town.
We already have 25% unemployment.
It wouldn’t matter if it was 35%.
All is swept under the rug, out of sight. You’ll never actually see another food line, not as long as SNAP cards exist. And that’s just how your federal government wants it.
Pain doesn’t exist if no one can see it. Right? Right.
Welcome to crony socialism of the 21st Century.
I think we have plenty not willing to work because they can make more being at home on fake disability or some welfare scheme. I still see plenty of people getting hired.
Absolutely true on both scores.
Yet those getting hired make much less than they used to.
Socialism. Ain’t it grand? Become a lazy, lying bum and be rewarded for it while those who work are rewarded with less.
Guess what? We’re running out of other people’s money.
The standard of living for those who are productive is going down. The standard of living for those who produce nothing is going up.
Between the corporate welfare queens and the Free Sh!t Army, the productive taxpayers are being squeezed into oblivion.
bled dry.
those who work are rewarded with less.
And whose fault is that? Actual answer, please.
because if this sucker goes down it is going to be very, very ugly.
Way to toe the Bush propaganda line…
We could not handle another depression, breadlines, 25 percent unemployment, etc.
You haven’t been paying attention. In spite of all of the fluffing, the participation rate shows that we are still in the midst of a similar episode today; real employment has not improved. Breadlines are still here, too, they just look different today: food banks, McD’s dollar-menu, and Walmart lines at midnight on EBT-refill date.
“But I take the point that in a way they are also looking out for everyone because if this sucker goes down it is going to be very, very ugly. We could not handle another depression, breadlines, 25 percent unemployment, etc.”
We are already there. All the fake stimulation and numbers and rhetoric to pawn this off as a recession doesn’t compute. The powers that be failed to see it for what is was. They felt that if they could keep things going long enough that things would turn around. They looked at all the monies in savings and figured if they could get people to spend (more like force because of low interest rates) that eventually things would get better, plus they felt they had the power to talk the economy back into property. Well, we are finally hitting the wall. No where to hide. The future doesn’t bode well, not only for the USA but world wide.
Which, allows us to dig down a bit and ask the question why are they doing this ?? Although, the benefit does accrue to a large degree to the big players, I think they are very afraid deflationary spiral will take hold…
More importantly, you need to ask the question of how the Wall Street-Federal Reserve looting syndicate is getting away with these swindles. The answer is simple: 95% of the US electorate (and 100% of Obama, McCain, and Romney voters) continue to willingly grab their ankles for crony capitalism’s Republicrat enablers.
And the sheeple line up for another fleecing in 2016. Baaaaa! Baaaaa!
http://online.wsj.com/articles/hillary-clinton-to-face-skeptical-iowa-voters-1410477688
This
Break out the Xanax, Amy.
http://wolfstreet.com/2014/09/13/california-home-sales-collapse-prices-hit-wall-millennials-blamed/
This must be part of the explanation why home sales in the expensive parts of California, which is where most people live, are collapsing: according to a Harris Poll on behalf of electronic broker Redfin, 92% of millennials who don’t already own a home do not plan on buying one in the future. Ever.
These people, now between 25 and 34, are in their peak home-buying age. They’re the much sought-after first-time buyers. They’re the foundation of the market. But not this generation. Homeownership rate among them, according to the Commerce Department, already plunged from 41% in 2008 to 36% currently; as opposed to 65% for all Americans [Here’s the Chart that Shows Why the Housing Market Is Sick].
These folks are not “pent-up demand” accumulating on the sidelines, as the wishful thinkers have proclaimed.
“Millennials who flock straight from college to San Francisco and other expensive cities are making a choice to spend their income on quadruple-digit rents and eight-dollar gourmet hot dogs from trendy food trucks,” explained Redfin San Francisco agent Mark Colwell. “This means they’re not saving for a down payment, further removing them from the housing market.”
Ever ??
Thats a pretty long time…….
Maybe Amy can find a job on one of those trendy food trucks.
Thats a pretty long time…….
+1. These kids have no idea what they will or won’t want in five or ten years.
They’ll probably still be ass broke in their dead end, menial jobs.
They’re not ‘removed from the housing market’. They are paying rent, and unless they move to a more affordable market, they will be for awhile.
Bay area has crazy rents. For people who bought multifamily 10 years or more ago, it is a windfall of return and capital appreciation.
They’re paying what they can afford. And what they can afford decreases every month, as it has been for the last few years.
Extend and pretend: The PTB does the extending, the dupes do the pretending…
Prices 10 years ago? If you paid those prices, you’re hopelessly underwater.
Why should any Millennial take on a mortgage? How do they stand to benefit by doing so?
It’s funny how oldsters expect youngin’s to buy their expensive crap shacks and fund their retirement and entitlement programs.
Never in the history of the United States have senior citizens held a higher percentage of societal wealth.
Their parents will leave them theirs if they didn’t hock it with a reverse mortgage,
Redfin, 92% of millennials who don’t already own a home do not plan on buying one in the future. Ever.
Who will liquidate it for whatever they can get for the dump.
or maybe be forced to live in it the rest of their lives with those lucky ducky $10hr jobs
This must be part of the explanation why home sales in the expensive parts of California, which is where most people live, are collapsing: according to a Harris Poll on behalf of electronic broker Redfin, 92% of millennials who don’t already own a home do not plan on buying one in the future. Ever.
These people, now between 25 and 34, are in their peak home-buying age. They’re the much sought-after first-time buyers. They’re the foundation of the market. But not this generation. Homeownership rate among them, according to the Commerce Department, already plunged from 41% in 2008 to 36% currently; as opposed to 65% for all Americans [Here’s the Chart that Shows Why the Housing Market Is Sick].
These folks are not “pent-up demand” accumulating on the sidelines, as the wishful thinkers have proclaimed.
Unless they’re homeless, they gotta live somewhere.
So they rent for half the monthly cost..
Your point is?
Home prices are not falling in California.
They’re falling in all 50 states now.
Sandy!
http://www.zerohedge.com/news/2014-09-12/fed-has-big-surprise-waiting-you
The topic of potential interest rate hikes by central banks is no longer ever far from any serious mind interested in finance. Still, the consensus remains that it will take a while longer, it will take place in a very gradual fashion, and it will all be telegraphed through forward guidance to anyone who feels they have a need or a right to know. Sounds like complacency, doesn’t it?
Now, it seems obvious that the Bank of Japan and the ECB are not about to hike rates tomorrow morning. In Europe, dozens of national politicians wouldn’t accept it, and in Japan, it would mean an early end to many things including Shinzo Abe.
But the Bank of England and the Fed are another story. Though if the Yes side wins in Scotland next week, the narrative may change a lot of Mark Carney and the City. That leaves the Fed. And it’s important to realize and remember that, certainly after Greenspan entered the scene, speaking in tongues, the Fed has become a piece of theater. The Fed is about perception. About trying to make people believe something, and make them act a certain way that they choose for them.
That’s why after the Oracle left they pushed first a bearded gnome and then a grandma forward as the public face. The kind of people nobody would perceive as a threat. Putting a guy who looks like second hand car salesman in charge of the Fed wouldn’t work.
Not when a big financial crisis looms, and then continues on for a decade and counting. That makes keeping up appearances the no. 1 priority. That’s when you want a grandma, or you’d lose your credibility real fast. You need grandma for your theater, for the next play you’re going to stage.
That market volatility today is at record lows is part of a big play, or a big scene in a play if you will. And the goal is not to make markets look good, as many people think. Making markets look good, making the economy look good, is just an intermediate step designed to lure everyone in.
You make people believe you got their back. All the big investors. Because they make tons of money, while they thought maybe the crisis could have really hurt them. Even the public at large feels you got their back. Because they don’t understand what the sleight of hand is.
The big investors understand, but you got them believing you will play that hand forever, or let them know well ahead of time when you intend to fold. The big investors think you will skim the public, but not them. They think you’re all on the same side. And the public thinks you’re healing the economy, and saving their jobs and homes and pensions.
When rate hikes are discussed, like I did two weeks ago in This Is Why The Fed Will Raise Interest Rates, most people have similar initial reactions. ‘They can’t do that, it would kill the economy, or at least the recovery’.
But the truth is, there is no recovery. It’s just a scene in a play. And the economy is completely shot, it only appears to be left standing because the Fed poured oodles of money into it. Or rather, into a part of the economy that it can control, that it can get the money out of again easily: Wall Street banks. And Wall Street equals the Fed.
What is the REAL inflation rate, given the Fed’s tsnumani of money-printing?
http://wolfstreet.com/2014/09/12/how-the-government-hides-red-hot-housing-inflation/
Comrade Pelosi: Civilization in jeopardy if the GOP takes the Senate. Which is why we must import those cultured and refined MS-13 members to set things right.
http://dailycaller.com/2014/09/12/nancy-pelosi-civilization-in-jeopardy-if-gop-takes-senate-video/
Flashback: Obama in 2008: Adding $4 Trillion to National Debt ‘Unpatriotic’
By Matt Cover
as a presidential candidate in 2008 Obama criticized then-President George W. Bush for adding $4 trillion to the national debt, saying it was “unpatriotic” and also “irresponsible” to saddle future generations with such a large national debt.
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion dollars for the first 42 presidents — number 43 added $4 trillion dollars by his lonesome, so that we now have over $9 trillion dollars of debt that we are going to have to pay back — $30,000 for every man, woman and child,” Obama said on July 3, 2008, at a campaign event in Fargo, N.D.
“That’s irresponsible. It’s unpatriotic,” said candidate Obama.
Jan 11, 2014 … In fact, by Friday, the U.S. debt had rocketed past $17 trillion. … At $17 trillion, this number has passed total U.S. gross domestic product (GDP),
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 105k -
One of the many Hope and Change statements delivered to the witless masses throughout 2008.
Fell for it hook, line and sinker.
As someone else said, as long as MY criminal is committing the act, it’s okay to look away.
The same dupes who fell for hope ‘n change in 2008 and 2012 will install Hilary Clinton in office in 2016, then wonder why things continue to get worse.
I’m planning on voting 3rd party, but if Hillary is the Democrat candidate I’ll have to vote for the GOP candidate, regardless of how despicable he might be.
If you look at the GOP’s history of last year’s losers getting the node at next election, it will either be Huckabee or Centrum.
In Colorado -
Please don’t do that. I did that in 2000 with the goal of stopping Al Gore, and look what we got instead.
And no, I should not have voted for Gore (who was/is horrendous). I should have voted third party.
Who you can vote for will be decided at the Bilderberg meeting next year.
I’m planning on voting 3rd party, but if Hillary is the Democrat candidate I’ll have to vote for the GOP candidate, regardless of how despicable he might be.
Thereby perpetuating the Republicrat duopoly’s crony-capitalist reign. Since both candidates will pursue the same corporate-statist, neo-con agendas, why vote for either one?
And I won’t vote at all. Voting only sanctions this rotten system of crony capitalism.
Thereby perpetuating the Republicrat duopoly’s crony-capitalist reign. Since both candidates will pursue the same corporate-statist, neo-con agendas, why vote for either one?
To keep Hillary out. It’s a lesser of two evils decision. Purely symbolic of course.
I suppose I should just not bother to vote. By becoming an unaffiliated voter I no longer vote in primaries, maybe I should just follow to the final outcome, or vote for the goofiest 3rd party candidate.
Huckabee LOL!
Once again, with feeling: George Carlin on “Why I don’t vote.”
https://www.youtube.com/watch?v=xIraCchPDhk
Thanks. I was tempted to repost that link. George was a genius.
And I won’t vote at all. Voting only sanctions this rotten system of crony capitalism.
I’m with Bill on this one.
I saw my first “I’m ready for Hillary” bumper sticker the other day—and threw up a little bit in my mouth.
Some folks never learn.
The Fed continues its ‘Economic Policy Theater’ with the creation of a “Financial Stability Panel.” Congress is too venal and incompetent to do its job so just give it to… people who are very efficient but not at the tasks which will benefit society
Now, I have no doubt, the Fed is interested in financial stability. The “Friends of the Fed” probably profit from some measure of financial stability. The implication that it will be in any way, shape or form dealing with the welfare of society at large, brought guffaws.
Additionally guffaw inducing is how the Fed was so utterly and completely asleep at the switch in the face of the largest financial disruption since the Depression, and now its new conceit is that it will look for just those sorts of disruptions, despite Geithner saying that he was not a regulator while head of the New York Fed.
Absolutely farcical, but darkly amusing nonetheless.”
Federal Reserve creates financial stability committee
MarketWatch
Published: Sept 12, 2014 5:16 p.m. ET
WASHINGTON–The Federal Reserve is elevating its postcrisis efforts to monitor potential threats to financial stability, creating a high-level committee led by the central bank’s No. 2 official.
The committee, which includes Fed Vice Chairman Stanley Fischer and governors Daniel Tarullo and Lael Brainard, will play a role monitoring the financial system for emerging problems such as asset bubbles and analyzing how the central bank should respond. The committee’s makeup suggests it could be a powerful voice within the Fed on financial stability issues.
The Fed, under former Fed Chairman Ben Bernanke, created an Office of Financial Stability Policy and Research in 2010. Led by longtime Fed economist Nellie Liang, the office brings together economists, bank supervisors and others to help locate and address financial system weakness.
http://www.marketwatch.com/story/federal-reserve-creates-financial-stability-committee-2014-09-12-171031658
While the permabears of CNBC and other MSM corporate propaganda outlets keep up their relentlessly upbeat “the recovery is strengthening” meme, I keep reading these disconcerting “worst since Lehman” references. Maybe I should go out and buy an overpriced house and moar stawks?
http://www.zerohedge.com/news/2014-09-13/chinese-growth-slows-most-lehman-electric-output-turns-negative
While China may have mastered the art of goalseeking GDP, always coming within 0.1% of the consensus estimate, usually to the upside, even if the bogey has seen dramatic declines in the past few years, dropping from double digit annualized growth to just 7.5% currently and the projections hockey stick long gone…it may need to expand its goalseek template to include the other far more important measure of Chinese economic activity, such as Industrial production, retail sales, fixed investment, and even more importantly - such key output indicators as Cement, Steel and Electricity, because based on numbers released overnight, the Q2 Chinese recovery is now history (as the credit impulse of the most recent PBOC generosity has faded, something we have discussed in the past), and the economy has ground to the biggest crawl it has experienced since the Lehman crash.
What China needs is a $50 Trillion credit expansion!
And the “Lehman” references keep on coming.
http://www.fuw.ch/article/the-first-thing-i-look-for-is-the-exit-sign/
Well this should bolster confidence in Portugal’s banking sector….
http://www.reuters.com/article/2014/09/13/us-portugal-bes-resignation-idUSKBN0H80DR20140913
Region IV tips of the day
Do not let Adrian Peterson babysit your children, do not get into an elevator with Ray Rice and do not let Adrian Peterson babysit your children.
Better yet….stop watching sports. They are not worth the fame and money they get.
I didn’t know riding in elevators and hiring babysitters were sports.
The good old days
Squatter Nation: 5 years with no mortgage payment
By Les Christie June 12, 2011: 9:23 PM ET
NEW YORK (CNNMoney) — Charles and Jill Segal have not made a mortgage payment in nearly five years — but they continue to live in their five-bedroom West Palm Beach, Fla. home.
Lynn, from St. Petersburg, Fla., has been living without paying for three years.
In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home.
They’re not alone.
Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.
These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the “robo-signing” issue is particularly combative, it’s 807.
If they want to fight evictions hard, borrowers can remain in their homes even longer while their cases are being worked through.
The Segals have been doing that — in court. They bought their home in 2003 with an adjustable rate mortgage. After a few years, their monthly payments tripled to $3,000, just as their home-inspection business was cratering.
The Segals want the bank to modify the mortgage so payments are affordable, and they think the court will agree that their lender put them into a toxic loan.
“The evidence will show that we were defrauded,” said Jill Segal.
money.cnn.com/2011/06/09/real_estate/foreclosure_squatter/ - 108k -
Boy the way Beyoncé played
Songs that made the hit parade.
Guys like us we had it made,
Those were the days.
And you knew who you were then,
Refi cash was your best friend,
Mister we could use a man
Like Angelo Mozilo again.
Didn’t need no welfare state,
Everybody’s payments late.
My wife’s boob job sure came out great.
Those were the days.
# Bring back our Beats
I appreciated this effort. Nice work.
Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction.
So if that is the average, the outliers are likely way up there close to 1000 days. And after the foreclosure, the loanowners may be able to get up to another thousand days or so—I’ve been watching some houses on Redfin that still show no activity after a foreclosure having been completed three years back.
This is from June 12, 2011
I just wonder how many are still squatting without squawking since the settlement.
This is from June 12, 2011
Thanks, I missed that!
Hey Prime, that is good enough reason for me to continue renting rather than live among those swindlers.
Main reason why renter neighbors in multiple unit dwellings are more honest people. They who don’t get kicked out of their place paid their rent on time. You never hear of people who signed an apartment lease living rent free for years.
Oh by the way, they cannot be felons. They go through credit checks.
One of the easiest ways to do a background check on a person? Find out he is renting from a big apartment REIT like Equity Residential or Avalon Bay. They do the background check for you.
Many leases have rules that are taken seriously. When I rented in Northern New Jersey my new neighbors below me threw parties to early morning. I complained to management and she said the new neighbors violated the lease agreement. They were no longer noisy after I complained. They learned some people work for a living and have to be at the van pool parking lot by 7:00 a.m.
Cronysocialism. Allow as many people to live for free for as long as possible.
Matters not if it’s done through SNAP cards or by not making mortgage payments.
The [responsible] taxpayers still do the paying.
Got moral hazard? Thank you, Greenspan, Bernanke, and Yellen.
Region X checking in; good day.
We have a new dictionary definition for chutzpah.
http://www.zerohedge.com/news/2014-09-13/meet-bubblebusters-federal-reserve-launches-committee-avoid-asset-bubbles
Tiny House Nation
http://www.fyi.tv/shows/tiny-house-nation - 130k -
Spoiler Alert:
They spend a crap load of money on those tiny houses.
one thing you have to love/teach your kids is to play outside…a lot!
Plus you really dont need a lot of stuff today…big flat screen tv laptops mac mini….small can be done
Florida Housing Demand Down 5% YoY; Posts First Negative Year Since 2009
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
how far are you in the hole?
Falling prices AZ._Fraud.
Get the cheap gold now. Every investor who is interested in
diversification should be on the gold and silver bandwagon right
now because the price is so deliciously low.
I think I only have a 3% allocation in precious metals
so I need to stock up myself.
A safer play is strong gold stocks because you don’t
have the risk of thievery with physical gold. I’ve been
in and out of gold stocks 15 times in the last year.
AUY, that’s Yamana Gold is a very strong gold play because
their holdings in Canada are fantastic. (Disclosure, I own no
shares of Yamana presently, but I think the play is prudent
at this juncture.) If gold goes down another 20, I’m calling a
bottom on that nonsense. Look at the smart money in India.
Mining companies can issue unlimited stock, diluting existing shares. And they have a lot of risks to their operations.
I think gold mining ETFs are great and worth a buy and hold. Thinking I have enough of that. My physical holdings are only about 7% of my net worth. That 7% figure has been steady for a couple of years, although the stock market has done very well. I only buy a set amount of $ worth of precious every year. This year is the last year I only buy gold (one more purchase coming up). Next year I return to buying silver, palladium, platinum, and gold.
I keep only some in a safe deposit box and keep some in good hiding places. My cash is “under the mattress.”
don’t hold any worthless paper
If it’s so worthless send it to me.
SH
I think you have an excellent strategy.
Thanks for the comments.
You’re welcome!
Time for dips to buy!
That’s exactly what I’m doing. A down day is a buy day, and eventually you have to win.
Yes, but some are holding a substantial percentage of the world’s future supply. That’s got to have real value in a nearly valueless
world. All tangible resources have a base net value, imho.
I’m still long oil stocks for the same premise, and they are undervalued
in this braindead world.
How could Twitter be valued at 45 billion and a true major player in the oil business with some of the world’s finest proven reserves be
only worth 15b?
Oil stocks certainly have value. Better than cash. Although one should have lots of cash, one should also have a lot of energy stocks. Energy makes up ten percent of the allocation in my Vanguard 500 index fund. And I am about to have over $220k in that fund (in another month as my old 401k transfers to a new fiduciary that has mostly Vanguard Admiral funds).
I think agricultural commodities would be okay but I am interested in nonGMO, organic produce. I think Farm REITs could be a good idea.
Sold more of my former company stock on two days earlier this week. Gearing up for more wine investing and to have cash on hand for bottom feeding stock funds when the big 40% hit occurs.
Yes GMO’s will grow as knowledge increases
That’s a good call.
And with a social conscious
International Energy Agency (IEA) calls drop in oil consumption “nothing short of remarkable.” What’s so remarkable about crony-capitalist economies that relentlessly cut “headcount” and jobs to goose their stock prices and CEO compensation? Memo to IEA: the unemployed don’t drive, and the FSA is sitting on their morbidly obese rear ends chatting on their Obama phones and watching their big screen TVs, which also doesn’t consume any oil.
http://www.marketwatch.com/story/iea-again-cuts-forecasts-for-oil-demand-2014-09-11
Taxpayers, get ready to bail out another oligarch-run crony capitalist kleptocracy and pump more billions into yet another conflict.
http://www.marketwatch.com/story/ukraine-economy-battered-fighting-resumes-in-east-2014-09-13?link=MW_latest_news
phony scandals