Looking For The Philosophers’ Stone To Make It Last
It’s Friday desk clearing time for this blogger. “Northern Virginia had plenty of homes on the market in November, with a 35 percent increase of active listings compared to one year ago. Suzanne Granoski, who is the 2015 NVAR Secretary/Treasurer, noted that house hunters know the sales pace has slowed. ‘Some buyers are confused by thinking that more supply should mean lower prices but the demand is there for homes that are priced accurately.’”
“A sluggish November for home sales and stagnant fall inventory has given buyers the upper hand in the Twin Cities housing market. ‘There’s kind of a hangover of inventory from the fall that isn’t selling,’ said Amy Jurek, a sales agent with Re/Max Advantage Plus. ‘Buyers seem to be back in the driver’s seat this winter.’”
“The slowdown in Las Vegas’ housing market is poised to continue next year, a new report says, as investors keep pulling back from the valley. Business is slowing valleywide. More listings are being ignored, sales volume is falling and prices aren’t climbing nearly as fast. Homeowners, emboldened by fast-rising property values the past few years, are overpricing, agents say. The median listing price of single-family homes without offers was $249,500 in November — 23.5 percent higher than what the typical house sold for last month, according to GLVAR data.”
“‘Our local housing market has been fairly stable this year,’ said GLVAR President Heidi Kasama. ‘Unless something dramatic happens in the coming months, we expect to see more of the same in 2015.’”
“Prices fell for the eighth consecutive month year-over-year, Timothy Warren Jr., chief executive officer of The Warren Group said. The median price of a single-family home in Connecticut fell 3.4 percent from $250,000 in October 2013 to $241,600 during the same period this year. Byron Lazine, a real estate agent with Seaport Real Estate Group in Mystic, said that high levels of existing housing stock ‘will continue to have downward pressure on prices’ going forward.”
“Foreclosures are on the rise again in Massachusetts, as banks begin to lower the boom on delinquent homeowners they have let slide for years. One of the biggest barriers to scooping up a foreclosure is competition. ‘We make money turning over properties,’ Nick Aalerud, principal of Woburn-based AA Real Estate Group. He fears he will wind up losing money on a three-bedroom ranch in Tyngsboro he scooped up for $109,900. Sounds like a great price, but Aalerud had to tear down the house, only to find it infested with spiders and the well pump had gone missing.”
“Home repossessions in the Tulsa area spiked upward in November. Brian Heard, civil unit deputy with the Tulsa County Sheriff’s Office and the organizer of the weekly foreclosure auctions, said they anticipate the number of homes to be auctioned will significantly increase. ‘We’ve been told by attorneys they’re about to come in, though we haven’t seen them at the sales yet,’ he said. Heard said if a surge does hit in the coming weeks, it would be unusual. ‘Usually the amount of foreclosures goes down during the holidays,’ he said.”
“November foreclosures in Oregon were up sharply over the previous year, according to RealtyTrac. The figures reflect a pent-up push by lenders to take possession of Oregon properties where borrowers had fallen behind in their payments. ‘I think what we see is the beginning signs of that other shoe beginning to drop with the Washington County numbers in November,’ said RealtyTrac VP Daren Blomquist. ‘And in fact I think we see evidence of that in Clackamas County and Multnomah County in October, when foreclosure activity was up from a year ago in both counties.’”
“John Helmick, chief executive of Gorilla Capital, which tracks foreclosure data in 24 Oregon counties, has described this fall’s surge in filings as a breaking of ‘the logjam of filings at the front end of the Oregon foreclosure system.’”
“Mortgage applications to purchase a newly built home dropped dramatically in November, signaling a slowdown in sales for the nation’s builders. ‘There was less urgency in the last quarter,’ Ara Hovnanian, CEO of K Hovnanian Homes, told analysts. ‘Given the gains we’ve seen in 2014 in employment, we would have expected housing demand to be stronger then the low levels we are currently experiencing.’”
“‘As we look at 2015, the house we sell today is going to struggle to be marginally accretive. We just don’t have the pricing power to improve the margin,’ Toll CEO Douglas Yearley Jr. said. The same is true of nonluxury builders, like K Hovnanian. ‘I’d like to say we raised prices, but the increase was primarily due to geographic and product changes,’ Hovnanian said.”
“‘The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers’ stone to make it last.’ — Ludwig von Mises (1940).”
“‘Panics do not destroy capital, they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.’ — John Mills (1867).”
“Former Federal Reserve Chairman Alan Greenspan, who was blamed by some economists for overheating equity and housing prices in the 1990s and 2000s, said that were he in the job today, he would take pre-emptive action to tackle asset bubbles if they were financed by leverage.”
“Greenspan, who argued in office that it was better to clean up after an asset bubble had burst rather than artificially prick it, told delegates at a conference that he believed that argument is correct when a speculative boom isn’t financed by debt, mentioning the 1987 stock market crash as an example. If the overheating was caused by leverage, however, ‘then you’re going to have problems,’ he said.”
“‘Bubbles are aspects of human nature and you can try as hard as you like, you will not alter the path,’ Greenspan told the audience. ‘I still hold to the general view that unless you have debts supporting the bubble, I would just let it alone because certain things about human nature cannot be changed and I’ve come to the conclusion this is one of them.’”
‘Some buyers are confused by thinking that more supply should mean lower prices but the demand is there for homes that are priced accurately.’”
The only thing confusing is the circular nature of her statement. “priced accurately” is a euphemism for “lower”. She’s confused. The buyers are clear: lower prices!
If the currency is debased 2% / year shouldn’t house prices go up 2%/ year?
70/2 = doubling every 35 years
Yet with prices falling, currency is more valuable with each passing day.
Buy tomorrow for less.
Depreciating assets don’t go up, especially if you correctly factor in maintenance and repair costs to your calculations.
The dollar is up 10% since July, houses are not. So no, home prices are not tied to currency fluctuations.
not w priv sec wages falling
‘Some buyers are confused by thinking that more supply should mean lower prices but the demand is there for homes that are priced accurately.’”
What bullsh*t!
Considering prices are falling and velocity is increasing, I’m not sure what planet that realt-liar is on.
“Bubbles are aspects of human nature…”
As Mises points out Alan, you couldn’t recognize a bubble until after it burst. It was your lose lending that guaranteed bubbles, and you still don’t get it.
“It was your lose lending that guaranteed bubbles, and you still don’t get it.”
I think he gets it but he doesn’t want to accept it, to admit it.
If he admits that he was wrong then he wouldn’t be called The Maestro anymore and it is recognition such as represented by this title that, at the root, drives these guys.
Ever notice that these guys never just fade away?
‘Greenspan, who argued in office that it was better to clean up after an asset bubble had burst rather than artificially prick it, told delegates at a conference that he believed that argument is correct when a speculative boom isn’t financed by debt…If the overheating was caused by leverage, however, ‘then you’re going to have problems,’ he said’
It looks like an admission that bubbles can be spotted. How many bubbles aren’t financed?
It’s interesting to hear people tie the coming junk bond debacle to the Fed so quickly. “Oops, oil prices down, who’s gonna get slaughtered?” Here’s a note for the media out there; it ain’t just gonna be the oil sector. At least they are producing something useful. I expect the bonds that went to all sorts of endeavors will be found to have been misjudged in the “search for yield.” Stock buy-backs? That’s really productive.
“Stock buy-backs? That’s really productive.”
They made productive use of the junk bond proceeds.
stock buybacks are a way for company insiders to move their own stock so stock options can be cashed out and bonuses keep flying.
‘RealtyTrac says in its November U.S. Foreclosure Market Report that 55,906 properties started the foreclosure process during the month, a decrease of 1 percent from October but a 6 percent increase from a year ago. This was the first such increase after 27 consecutive months of year-over-year declines.’
‘RealtyTrac also said that the 2012 vintage of mortgages is not performing as well as some of its predecessors. The company however did not link this to the recent increase in early stage defaults.’
‘The increase in foreclosure starts was not an isolated one. Starts were up in 30 states with the greatest increases in New Jersey (+256 percent), Nevada (+138 percent), and Massachusetts (+137 percent).’
‘There were 50,102 properties scheduled for the first time for foreclosure in November, a year-over-year increase of 5 percent. Thirty states shared in the increase with Kentucky (+163 percent), Tennessee (+159 percent) and North Carolina (+157 percent) heading the list.’
“The housing market is struggling to find the new normal when it comes to a tolerable level of foreclosure activity in this post-Great Recession economy,” said Daren Blomquist, vice president at RealtyTrac. “Finding that new normal requires striking a balance between too much loan risk, which would result in another housing meltdown, and too little risk, which could result in a stunted recovery.”
“Foreclosure rates on 2014-originated loans are actually higher than 2013-originated loans nationwide and in many markets, indicating that lenders are open to a slightly higher level of risk than we’ve seen over the past five years of extremely tight lending standards,” Blomquist continued. “But it’s unlikely that lenders will dial up that risk level too quickly going forward given that many are still dealing with working through a lengthy and messy foreclosure process on risky loans from the last loose lending spree.”
It’s hard to understand how loans originated this year would already be in foreclosure.
It’s hard to accept that’s for sure. It’s also hard to understand how that could happen in a functional lending system run by grownup professionals. On the other hand…
‘Inventory is a major driver of California’s housing market and right now, there isn’t much of it, especially in Silicon Valley, Appleton-Young said. Home sales have been flat since the spring of 2014 because inventory is so tight that the strong demand has caused prices to rise higher, making it challenging for first-time buyers to enter the marketplace. She cautioned that the market cannot remain healthy if first-time buyers cannot purchase homes.’
“They are being priced out of the opportunity to grow wealth in their lifetime,” she said.’
Ol’ Lester Appleton Yun…. you can always count on her to lie and distort.
“‘Some buyers are confused by thinking that more supply should mean lower prices but the demand is there for homes that are priced accurately.’””
Sounds like some realtards are confused.
Arlington, VA Sale Prices Plunge 15% YoY; Inventory Billows As Sellers Seek To Offload Houses
http://www.zillow.com/arlington-va-22201/home-values/
‘The same thing that happened to the housing market in 2000 to 2006 has happened to the oil market from 2009 to 2014, contends well-known trader Rob Raymond of RCH Energy. And he believes that just as we witnessed the popping of the housing bubble, we are in the midst of the popping of the energy bubble.’
“It’s the outcome of a zero interest rate policy from the Federal Reserve. What’s happened from 2009 to 2014 is, the energy industry has outspent its cash flow by $350 billion to go drill all these wells, and create this supply ‘miracle,’ if you will, in the United States,” Raymond said Thursday on CNBC. “The issue with this has become, what were houses in Florida and Arizona in 2000 to 2006 became oil wells in North Dakota and Texas in 2009 to 2014, and most of that was funded in the high-yield market and by private equity.”
This is a very politically-connected industry and if there’s any way the taxpayers can be made to bail the industry out, they will be. I predicted only a couple of years ago that the boomtown areas in western North Dakota would be bust by 2025 if not sooner.
New lending guidelines adopted this week by mortgage giants Fannie Mae and Freddie Mac will allow more people in Beaufort County to buy their first houses, real estate experts say. Sackman, the real estate broker, said new federal programs usually have a positive effect on the market. “It’s going to put more people within reach,” he said. “Any time people come out-of-pocket less, that’s a good thing.”
‘First-time home buyers have caught a break, thanks to a 3 percent down payment program re-introduced by mortgage giants Fannie Mae and Freddie Mac.’
‘They have accepted 5 percent down payments but larger ones have been the general rule since funky mortgages issued during the last decade helped trigger the Great Recession. The hope now is the lower down payment will inject some life into the moribund housing market.’
‘Fannie calls its program My Community Mortgage and Freddie’s is Home Possible Advantage, different names for programs discontinued several years ago as the housing market collapse deepened.’
‘Realtors applaud lowering the limit. “It’s very exciting. We’re thrilled to see this,” said Chris Kutzkey, president of the California Association of Realtors. “We, as an organization, have been at the table with Fannie and Freddie and HUD (the federal Housing and Urban Development Department) saying that we are through the horrific times so let’s loosen that credit box up a bit for our first-time buyers.”
“Realtors applaud lowering the limit.”
Bahahahaha … Imagine that!
We’ve moved well beyond history just rhyming.
“Appraisers Inflating Value of Properties Based on Pressure from Loan Officers and Real Estate Agents”
http://www.themiamilaw.com/blog/2014/12/appraisers-inflating-value-properties-based-pressure-loan-officers-real-estate-agents/
Not really news as this has been in overdrive for 15 years now but it’s good it’s getting attention.
“‘The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers’ stone to make it last.’ — Ludwig von Mises (1940).”
Paging Harry Potter!
Encinitas, CA Sale Prices Crater 12% YoY; Inventory Balloons As Housing Demand Wanes
http://www.zillow.com/encinitas-ca-92024/home-values/
‘Many oil companies are beginning to pare back capital expenditures, reconsidering pouring billions of dollars into expensive projects that may or may not be profitable in the current environment.’
‘ConocoPhillips announced on December 8 that it would slash capital expenditures in 2015 by 20 percent, dropping its spending budget to $13.5 billion. And in a sign that the oil price slump is starting to take a major toll on future investments, ConocoPhillips said that it would “defer significant investment” on its projects that are in their earlier stages, such as its fields in the Montney and Duvernay in Canada, along with its holdings in the Permian basin and the Niobrara.’
‘BP is also hoping to cut costs. It expects to lay off workers and trim spending, perhaps by as much as $2 billion. It is unclear how much spending the oil major already had planned to cut, as it continues to downsize after steep losses stemming from the Deepwater Horizon disaster in 2010, but a company spokesman said the drop in oil prices “has increased our focus on these activities.” In an investor presentation, BP said that it usually approves new projects when oil prices are at $80 or higher.’
‘Chevron decided to delay the release of its budget, perhaps because of how volatile the oil markets have become in the fourth quarter of this year. According to an average of analyst predictions, market watchers think Chevron will slash its budget by 11 percent next year.’
‘Oil majors Royal Dutch Shell are ahead of the curve, having implemented cost cutting and divestment measures earlier this year before oil prices dropped. Total may further put off investment in the North Sea over the next two years.’
‘Cenovus Energy, a Canadian oil sands producer, announced it would cut spending by 15 percent, refocusing its cash on its producing assets. For its part, EOG Resources will sell off its Canadian assets and lay off its employees based there.’
‘But there are smaller firms that are in a much tougher position because they lack a footprint in downstream sectors, which helps insulate some of the larger integrated companies. Goodrich Petroleum has seen its stock collapse by more than 87 percent since July. It has debt three times higher than its market value and is drilling in expensive regions in Louisiana and Mississippi. The situation is darkening for the Houston-based company – it is now seeking to sell its Eagle Ford assets in a desperate bid to raise cash. Goodrich will axe its spending by half for 2015.’
‘Oasis Petroleum, another Houston-based exploration company, will also halve its 2015 budget, lowering it to $750-$850 from $1.4 billion it expects to spend this year.’
‘Oil field services companies are also feeling the heat. Schlumberger and its peers will cut prices for their services in order to maintain interest, but a downturn in drilling will hit the sector hard. Schlumberger is ridding itself of about one-third of its fleet of boats, writing off $800 million.’
‘There isn’t an obvious reason to think that oil prices will turn up anytime soon. OPEC announced on December 10 that it expects demand for its product to hit the lowest levels in 2015 since 2003. It expects markets to demand 28.9 million barrels per day, lower than the group’s current production level of about 30.5 million barrels per day.’
‘The only hope for the industry in the near term is Saudi Arabia making an about-face from its position in Vienna in November. With oil prices nearing $60 per barrel, all eyes are on OPEC’s de facto leader. But the Saudi Oil Minister poured cold water on that possibility on December 9. “Why should I cut production?” Ali Al-Naimi said told reporters in Lima, Peru, according to Bloomberg. “This is a market and I’m selling in a market. Why should I cut?”
The Saudis have massive downstream integration. Biggest chemical plant in the world is coming online.
Rant on:
I was scrolling through Zillow homes for sale in the Hillsborough County part of Tampa Bay yesterday, and all I can say is, EVERY MAN A KING! Granite countertops! Stainless steel appliances! Surround sound! Three and four car garages! Garden Tubs! Walk in closets! His and hers vanities! Park like settings! Brick pathways! Man caves with BEER FRIDGES! Bonus rooms! Swimming pools with heated SPAS! Guest suites! Built-Ins! Travertine Marble! Two story foyers!
And my favorite: The KOI POND! (or as some illiterate realtors call it, the “coy pond”, lol.)
And this is in TAMPA BAY, fer chrissakes. Not Palm Beach, not Hobe Sound, not Key Biscayne, not Naples, not even that faux celebrity boy band Tiger Woods nabe in Orlando. In the cookie cutter burbs of TAMPA BAY! Half million dollar or more homes. And not even owned by professionals or tech moguls. Nope. We’re talking small biz people with used car lots or daycares.
if the middle class is getting a good screwing, there are some members of the class who desperately deserve it.
Rant off.
We’re talking small biz people with used car lots or daycares.
My coworkers tell me that “quality” daycare costs over $1000 a month. If you watch 10 sprogs you’re making more than most cube farm inmates.
Heh, that’s in Colorado, not Florida and certainly not Tampa Bay. Plus the overhead and regulation is ridiculous, or so I’m told.
Also take into account that the $1000/month is on paper, I’m sure there’s considerable stiffage in the biz.
I bet liability insurance for a day care is through the roof…
Not if you are judgment proof.
Not if you are judgment proof ??
And how/who is that ??
Unlicensed daycare is a code compliance officer’s wet dream
And some of those houses are being built on spec. And the construction is shoddy. And many of the same problems as before.
Looking at everything, you would think that we have become more prosperous. But we haven’t.
What’s the matter with us?
‘It used to be that many Americans worked for a company for decades and looked forward to the time when they could retire and collect a pension. Your pension was a guaranteed stream of income that would come faithfully until you died.’
‘But increasingly we see pension promises broken. And it’s sad and troubling. Think Detroit. This summer, Detroit retirees voted to accept cuts to their pensions.’
“As the public pension debacle in bankrupt Detroit shows, we may never find a solution that completely eliminates the risk of your money running out,” Dan Kadlec wrote recently for Money/Time.’
“The deal still left the city’s 32,000 current and future retirees with diminished benefits and no certainty that they won’t be asked to give up more down the road,” Kadlec said. “Their fate is largely in the hands of the markets — as is the case for millions of workers saving in 401(k) plans, and even many of those still covered by a private pension.”
‘Then in more pension news this week, congressional leaders struck a deal that would allow cuts to retiree benefits in some struggling multiemployer pension plans. It would for the first time allow the benefits of current retirees to be severely reduced, The Washington Post’s Michael Fletcher reported.’
“If passed, the change would apply to multiemployer pensions, where a group of businesses in the same industry joins forces with unions to provide pension coverage for employees,” Fletcher wrote. “As many as 200 multiemployer plans covering 1.5 million workers are in danger of running out of money over the next two decades. Half of those are thought to be in such bad shape that they could seek pension reductions for retirees in the near future.”
‘There are a number of reasons why the pensions are going broke — membership declines, an aging workforce and downturns in the stock market. Not surprisingly, retirement security advocates are worried that opening this door will lead to cuts for other retirees, too.’
‘Joyce Rogers, a senior vice president for AARP, said in a statement: “After a lifetime of hard work to earn their pensions, retirees don’t deserve to receive a bad deal, in which they have had no say, cut behind closed doors and secluding the very people who would be impacted the most.”
‘The truth is we’ve lost our say long ago. As I’ve told so many who ask how much they should save for retirement: Save as much as you can because, folks, not much is guaranteed anymore.’
On this:
‘There are a number of reasons why the pensions are going broke’
Notice no mention of the Federal Reserve holding interest rates down - for years. Millions of people being hung out to dry and no one asks, “why did you do this to me Bernanke?” Why should Bernanke care? He’s making $150k per speech.
“If passed, the change would apply to multiemployer pensions, where a group of businesses in the same industry joins forces with unions to provide pension coverage for employees,” Fletcher wrote. “As many as 200 multiemployer plans covering 1.5 million workers are in danger of running out of money over the next two decades. Half of those are thought to be in such bad shape that they could seek pension reductions for retirees in the near future.” ??
And its going to pass today as part of a budget deal along with a nice little goody for the banks…This pension thing may be just starting to go systemic…
‘There are a number of reasons why the pensions are going broke’
Notice no mention of the Federal Reserve holding interest rates down - for years. Millions of people being hung out to dry and no one asks, “why did you do this to me Bernanke?”
Because he wants you to buy stawks?
The people we voted into office don’t even care. And we didn’t elect Bernanke or Greenspan or Yellen. Nope, they really don’t care.
Also no mention that the Fed or whoever their bosses are apparently made a decision to bail out homeowners at the expense of savers and future pensioners. The Fed never seems to own up to the redistributive consequences of its policy actions.
The federal government can bail out the banker fat cats but not the retired trucker who earned his pension through hard work. Disgusting.
Did you think that QE you are so enthusiastic about was going to help the little guy? Right now congress is passing a bill that puts taxpayers on the hook for wall street derivative trades! And in the same bill sets up pensions to whittle payouts.
Wow….
I had no idea about the derivatives bill. Thanks, Ben.
Talk about something that could very well result in a horrendous outcome for a great many people.
Plus more pension cuts down the road when the next round of printing press-funded bailouts don’t provide enough largess to cover never-ending six-figure Megabank, Inc banker bonus pay plus Joe Sixpack’s paltry pittance of a pension…
Yep….All buried in a spending bill…F#@king crooked ba$tards…Thats how they cut deals between eachother…
So if pensions are cut, this might very well force the pensioners to sell their homes, bringing massive amounts of inventory to the market.
this might very well force the pensioners to sell their homes ??
And go where, sleep under a bridge ??
Or force them to go back to work.
Given massive rental vacancies, there is plenty to rent. And the best part about it is they cut their housing costs by 50%.
Or force them to go back to work.
The market value of both bonds and stocks have gone up — interest yield is secondary — in this environment a pension fund should have improved finances. If not it’s a sign it’s probably not being managed well. I doubt QE is to blame.
BTW while I do think QE was a brilliant masterstroke by Bernanke back around 2009-2011 as a temporary measure to stave off a depression, I think it has gone far too long and I don’t support QE-forever.
in this environment a pension fund should have improved finances ??
Improved off of what baseline ?? They got severely burnt in the 2008 meltdown and they were in various degrees of deficit even before that….A fully funded pension plan today is the anomaly not the rule…
Falling prices in 2008 or falling prices later.
Falling prices is the cure.
@scdave — Long-term holdings of 30-year gov’t bonds have enjoyed a large amount of capital appreciation. Same goes for stocks. Therefore a well-managed portfolio should be fully recovered. If a private sector pension is underfunded, it’s usually either due to poor fund management or the company has been in the habit of underpaying contributions.
Pension funds have a fiduciary duty to minimize and contain risk. Reasonable levels for interest rates are paramount to their success.
It’s only been in the last 15-20 years that they threw caution out the window and started chasing return wherever they could find it. And now the ill harvest starts to come in.
“If not it’s a sign it’s probably not being managed well. I doubt QE is to blame.”
It’s not about the pension assets, but rather the liabilities. They climb astronomically in a low-rate environment, making pension plans that would have appeared adequately funded in a higher-rate environment appear underfunded with ZIRP in play.
‘now the ill harvest starts to come in’
‘now the ill harvest starts to come in’
That’s another facet of the situation related to Fed bubble creation policy, which created moral hazard for pension fund managers to chase yield when little was available on relatively safe investments. Unfortunately, the 2008 financial collapse and similar black swan events create a double whammy for pension funds heavily invested in risk assets, as the asset side of the pension fund balance sheet shrinks at the exact same moment the liability side blows up.
It’s yet another version of A Perfect Storm!
Thanks to this blog and others I’ve been expecting the PBGC to topple for years so partly because of that I cashed out my pension when I retired in 2012…another factor was that the payout was waaay higher due to QE and artificially low interest rates. In general I think QE was a terrible idea and there will be hell to pay, have been affected personally by the ridiculous 0.1% interest on my savings and it fueled the flippers and speculators that made it virtually impossible to buy a house locally with a mortgage in 2011/2012 but it made retirement much easier since I was fortunate to have a cashout option.
chasing yields works till it doesnt. when will value matter again?
I’m not seeing much value anywhere.
San Juan County, WA Sale Prices Collapse 21% YoY; Demand Plummets
http://www.zillow.com/wa/home-values/
Demand may be dropping but prices aren’t. I am still seeing prices going up in the bubble markets. This makes no sense. Why is this happening?
The price declines are showing up all over the map.
I hope you don’t have one of these millstones hanging on your neck.
I think it is wishful thinking on the part of sellers and their Pollyanna realtors, the same thing happened in 2007…the bubble was hissing VERY loudly and ominously before the pop but it took many months for the reality to set in. I live in a bubble 2.0 market area and prices have not dropped much yet but the market is stalled and many places are not selling, I’m expecting to see big drops in 2015 much like 2008…
What an “energy market recovery” really looks like.
http://www.livetradingnews.com/wp-content/uploads/2014/10/oilpricedown.storyimage.jpg
‘Bill Gross, who joined Janus Capital Group Inc. in September, said there is “very little liquidity” in the corporate bond markets, especially in high-yield debt. “Everyone is trying to squeeze through a very small door,” Gross said today in a Bloomberg Surveillance interview with Tom Keene.’
‘A sharp decline in the price of oil has disoriented markets including changing the perception of the creditworthiness of corporates and countries, said Gross. “When levered money moves and tries to seek a safe haven, basically you have violent price movements,” Gross said.’
Yep.
Bulletin
Losses for U.S. stocks accelerate; Dow industrials now down 150 points
Here are the reasons oil is plunging to $58
By William Watts
Published: Dec 12, 2014 9:52 a.m. ET
NEW YORK (MarketWatch) — Oil’s stunning price collapse is undoubtedly one of 2014’s top stories and will remain a major theme for investors in 2015.
Indeed, oil futures (CLF5, -2.57%) have plunged almost 41% from the beginning of the year, including carnage in Thursday trading that saw oil settle below $60, at $59.95, marking its lowest settlement price since July 14, 2009, while Brent (LCOF5, -2.10%) is down about 43.5% for the year.
…
Here are the reasons oil is plunging to $57
By William Watts
Published: Dec 12, 2014 12:43 p.m. ET
…
“When levered money moves and tries to seek a safe haven, basically you have violent price movements,” Gross said.’ ??
Hence, we see 90 million dollar condo’s in New York….
Being liquid is like a warm comfortable blanket during a financial storm.
“‘Panics do not destroy capital, they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.’ — John Mills (1867).”
That is an AWESOME quote. How succinctly it describes today’s market. Facebook, Twitter, Instagram.